Atradius reports results 2010

Press release

Amsterdam, 23 March 2011 - Atradius reports 2010 net profit of EUR 124.9 million - S&P outlook raised to ‘Stable’.

Atradius, a global leader in trade credit insurance, debt collection and bonding, today reported a profit after tax of EUR 124.9 million* for its 2010 financial year. As a result of the improved performance of the Atradius Group and its parent company Grupo Catalana Occidente S.A., Standard & Poor’s (S&P) has raised its outlook for  Grupo Catalana Occidente S.A. and its main operating entities to “stable” and confirmed the A- rating.

The confirmation of the A – rating is based on the strong competitive position of the Group, its 2010 results and the increase in the level of solvency. S&P considers that the “stable” outlook reflects the solid results of the traditional business, despite the weakness of the Spanish market, and the strong and sustained results that the Group has achieved in the credit insurance business. The recovery in results and the improvement in future earnings generation capacity are the basis for the change in outlook to "stable".

Financial highlights

  • Profit after tax: EUR 124.9 million compared to a loss of EUR 113.3 million in 2009
  • Insurance revenues: EUR 1,449.7 million compared to EUR 1,589.3 million in 2009
  • Shareholders’ equity: EUR 1,035.2 million compared to EUR 905.0 million in 2009 
  • Gross combined ratio: 74.0% compared to 121.8% in 2009

Atradius risk acceptance increased in second half

Insurance premiums were impacted by lower insurable turnover of a smaller base of customers. Risk acceptance grew over the course of 2010 as expected default frequencies decreased. This resulted in an increase in new business volumes and improved retention rates.

The Atradius regions of Oceania and Asia, as well as Germany, Central and Eastern Europe increased insurance revenues and profits in 2010. All other regions improved profits, in many cases quite significantly.

Isidoro Unda, Chairman and CEO of Atradius commented; “Lower turnover in 2010 is reflective of the business environment in the first half of the year. Despite a slow, global economic recovery, sales volumes of our customers and our own risk acceptance have increased over the course of the year.”

Insurance performs relatively well in difficult conditions

Profits were driven by reduced claims and lower expenses. Insurance claims declined from EUR 1,356.8 million in 2009 to EUR 559.6 million in 2010. The gross claims ratio of 38.6% in 2010 improved significantly compared to 85.4% in 2009.  Gross insurance operating expenses improved to EUR 498.8 million in 2010 from EUR 524.7 million in 2009. The gross operating expense ratio improved to 35.4% in 2010 from 36.4% in 2009. Unda continued; “Insolvency rates were relatively high, but we expect default rates to decline in 2011. This has enabled us to increase our risk acceptance over the course of the year. We are now at risk acceptance rates comparable to pre crisis levels despite the higher insolvency rates.”

Debt collection wins new customers despite the dip in revenue

Collections and recoveries income of EUR 42.9 million in 2010 compared to EUR 69.6 million in 2009 reflecting fewer collections opportunities in 2010. “In 2010 we widened our marketing and sales efforts to expand our customer base. As a result, we have added a number of new large collections customers that will enable us to build our service revenues as business activity grows in 2011 and 2012”, added Unda.  

The outlook for 2011 – conservative growth

Unda concluded; “We expect global economic growth to continue expanding in 2011 at conservative rates. We plan on having a higher average risk acceptance rate than in 2010. This should provide us with a steady increase in insurable turnover and also increase new business and service revenue. Throughout the Atradius organisation we are committed to providing our customers excellent service. This starts with our account teams working directly with the customer and extends to customer service teams and underwriters who monitor and analyse buyer risks in every market in which our customers are doing business.”

* Atradius N.V. forms part of the Group of Grupo Catalana Occidente S.A. The figures included in the Financial Statements of Atradius N.V. could differ from those of Grupo Catalana Occidente S.A. due to necessary consolidation adjustments.

About Atradius

The Atradius Group provides trade credit insurance, surety and collections services worldwide, and has a presence through 160 offices in 42 countries. Atradius has access to credit information on 52 million companies worldwide and makes more than 22,000 trade credit limit decisions daily. Its products help protect companies throughout the world from payment risks associated with selling products and services on credit.

For further information:

Atradius Corporate Communications
Christine Gerryn
Tel.: +31 20 553 2047
E-mail: christine.gerryn@atradius.com
 

Disclaimer

The statements made herein are provided solely for general informational purposes and should not be relied upon for any purpose. Please refer to the actual policy or the relevant product or services agreement for the governing terms. Nothing herein should be construed to create any right, obligation, advice or responsibility on the part of Atradius, including any obligation to conduct due diligence of buyers or on your behalf. If Atradius does conduct due diligence on any buyer it is for its own underwriting purposes and not for the benefit of the insured or any other person. Additionally, in no event shall Atradius and its related, affiliated and subsidiary companies be liable for any direct, indirect, special, incidental, or consequential damages arising out of the use of the statements made information herein.