Amsterdam 27 April 2006 - Atradius N.V., a global leader in credit insurance and collections, today reported that it doubled profit after tax to € 100.3 million for 2005 compared to € 50.6 million in 2004. The increase in profits reflects the company's strong performance in its core credit insurance and services businesses.

 

Atradius Doubles Net Profit in 2005

Strong core business performance

Amsterdam 27 April 2006 - Atradius N.V., a global leader in credit insurance and collections, today reported that it doubled profit after tax to € 100.3 million for 2005 compared to € 50.6 million in 2004. The increase in profits reflects the company’s strong performance in its core credit insurance and services businesses.

Wilfried Verstraete, Chief Executive Officer of Atradius, said; "In 2005 we completed many of the business improvement initiatives announced in 2004. Divestments of non core activities and cost savings achieved through restructuring activities allowed us to invest in new products and better position the company for growth in 2006 and further."

 

Financial Highlights

• Net profit increased 98.0% to € 100.3 million (2004: € 50.6 million) benefiting from improved credit insurance results, strong growth in recoveries and collections, and gains on the disposal of non-core businesses.
• Net profit from continuing operations rose 68.1% to € 82.3 million (2004: € 49.0 million).
• Pre-tax profit from continuing operations rose 80.1% to € 104.0 million (2004: € 57.7 million).
• Total income after reinsurance increased 13.1% to € 730.2 million (2004: € 645.8 million).
• The gross cost ratio improved to 41.6% from 44.8% in 2004.
• The net claims ratio improved from 46.0% in 2004 to 43.0% in 2005.
• Net investment income of € 45.9 million was 29.4% lower (2004: € 65.0 million) reflecting a significant reduction in realised gains on investments.
• Return on average shareholders' equity was 18.1%.

 

Insurance Activities

The technical results of Atradius’ core insurance activities grew significantly to € 54.2 million on slightly lower overall turnover. This is the result of the phasing out of our bonding activities in the Netherlands, Germany and Belgium and substantially fewer fronting transactions. The gross claims ratio of 51.3% in 2005 increased from 46.8% in 2004 reflecting a high claims ratio in our bonding operations, notably in increasing provisions for discontinued bond types in Italy. In addition, we increased provisions on medium term instalment credit and booked substantial claims on fronting transactions that are largely reinsured. The net claims ratio (as a percentage of earned premium and credit limit fees) improved to 43.0% in 2005 from 46.0% in 2004. The net combined ratio (excluding restructuring costs) improved to 90.2% in 2005 from 90.9% in 2004.

 

Services

Service result before tax improved 40.6% to € 13.5 million (2004: € 9.6 million). Results were primarily driven by the growth in revenue from recoveries and collections activities.

 

Turnover Geographic

Despite strong competition and pricing pressures, which impaired our possibilities of achieving strong turnover growth, we realised positive turnover growth in France (5.9%), NAFTA (9.9%) Nordic (13.5%) and the Netherlands (2.2%), as well as in our smaller markets which combined, showed an increase in turnover of approximately 30.9%. In our Global unit, turnover grew 14.2%.

Wilfried Verstraete added, "In 2006 we are focused on building sustainable growth in turnover in our core businesses. We plan to achieve this through product innovation and industry leading customer service."

 

Restructuring and Product Development

The restructuring is on track with a net decrease of 340 employees in 2005. This decrease has been achieved despite the widening of our geographical footprint and the introduction of new product initiatives.

Atradius heightened emphasis on new product development has in 2005 resulted in the new Atradius Modula policy, the first in a family of products focused on providing customers with more flexible, easy to use insurance cover that is consistent in all the markets and countries they do business. Early in 2006 the Company launched three additional new products; Atradius Modula Focus, Atradius Analyser and Atradius Connect. Atradius Modula Focus is directed towards SMEs allowing them to select specific cover and manage their policy on-line. Atradius Analyser is a credit information product for the banking industry and Atradius Connect automates the process of communicating information between Atradius and customers. Additional credit insurance, information and SME specific products are currently in development and will be introduced later this year.

 

Goals for 2006

• Sustainable growth in turnover driven by product innovation and customer service
• Expansion of collections through increased activity from existing offices and the opening of new offices in 2006
• Maintain a sound risk portfolio

 

Market Outlook

Economic conditions in Atradius' key markets are improving and are expected to help drive increased turnover in 2006.

"We are anticipating continued strong growth in new and emerging markets in Central and Eastern Europe and Asia, concluded Wilfried Verstraete. "The NAFTA region is expected to again provide solid growth. Importantly, Western Europe is primed for growth and should continue to make a strong positive contribution to results. Our increased risk appetite will continue and as a result, we anticipate claims ratios moving slightly higher."

 

For more information;
About Atradius

Christine Gerryn
Director Corporate Communications
Keizersgracht 281
1016 ED Amsterdam
Tel.: +31 (0)20 553 2260
Fax: +31 (0)20 553 2212 

 

John Blackwell
Tel. 00 31 (0)20 553 2003
Mob. 0031 (0)6 5354 6659
Fax. 00 31 (0)20 553 2212
Email This e-mail address is being protected from spambots. You need JavaScript enabled to view it

 

Consolidated balance sheet (€ ,000)

Assets	31.12.2005	31.12.2004
Intangible assets	28,324	46,947
Property, Plant and Equipment	41,603	40,369
Investments	1,224,143	1,021,306
9 Investment property	11,065	13,595
1 Investments in associated companies	25,393	17,688
1 Financial investments	1,187,685	990,023
Reinsurance assets	725,579	691,887
Receivables	372,320	740,654
1 Miscellaneous assets and accruals	355,812	307,416
Factoring receivables	–	389,936
1 Other accounts receivable	16,508	43,302
Other assets	41,976	39,320
1 Deferred acquisition costs	16,377	13,793
1 Miscellaneous assets and accruals	25,599	25,527
Deferred income tax receivables	129,983	89,156
Current income tax receivables	61,153	46,508
Cash and cash equivalents	62,792	116,511
Total assets	2,687,873	2,832,658
Equity	31.12.2005	31.12.2004
Capital and reserves attributable to the equity holders of the Company	605,074	503,302
Minority interest	394	665
Total equity	605,468	503,967
Liabilities
Subordinated loans	116,374	115,781
Underwriting provisions	1,277,441	1,207,390
Non-underwriting provisions	33,126	59,478
Payables	178,916	540,662
2Accounts payable on insurance and reinsurance business	124,861	145,000
Factoring payables	–	371,160
2Trade and other payables	54,055	24,502
Other liabilities	228,696	215,619
Deposits received from reinsurers	98,829	107,108
Miscellaneous liabilities and accruals	129,867	108,511
Employee benefit liabilities	95,982	82,308
Deferred income tax liabilities	107,107	74,335
Current income tax liabilities	44,763	33,118
Total liabilities	2,082,405	2,328,691
Total equity and liabilities	2,687,873	2,832,658

Consolidated income statement (€ ,000)

Continuing operations	2005	2004
Insurance premium revenue	1,058,794	1,079,113
Insurance premium ceded to reinsurers	(521,202)	(631,015)
Net premiums earned	537,592	448,098
Service and other income	146,725	132,748
Share of profit of associates	6,830	6,175
Net investment income	39,065	58,826
Total income after reinsurance	730,212	645,847
Insurance claims and loss adjustment expenses	(597,448)	(550,975)
Insurance claims and loss adjustment expenses recovered
from reinsurers	321,102	299,636
Net insurance claims	(276,346)	(251,339)
Net operating expenses	(341,616)	(318,475)
Total expenses after reinsurance	(617,962)	(569,814)
Operating result before amortisation of goodwill &
finance costs	112,250	76,033
Impairment and amortisation of goodwill	(735)	(4,812)
Finance income and (expenses)	(7,542)	(13,501)
Profit before tax	103,973	57,720
Income tax	(21,655)	(8,745)
Profit for the year from continuing operations	82,318	48,975
Discontinued operations	2005	2004
Profit for the year from discontinued operations	17,964	1,666
Profit for the year	100,282	50,641
Attributable to:
Equity holders of the Company	100,443	50,590
Minority interest	(161)	51
	100,282	50,641
Earnings per share for profit attributable to the Company
From continuing and discontinued operations	1.77	0.89
From continuing operations	1.45	0.87
Outstanding ordinary shares	56,600,000	56,600,000