DLL, global provider of asset-based financial solutions, has reported strong results for the 2021 business year, recording net profits of €586m, a 226% increase on the prior year. The company saw both portfolio and income growth over the period, while risk costs improved significantly due to more favourable economic conditions in key markets. Excluding currency movements, DLL’s portfolio balance grew by 3% to hit €37.4bn.
Carlo van Kemenade, DLL CEO and chairman, said: “Consistent with our partnership approach, we have continued to work closely with our customers to overcome the obstacles placed in front of us by the pandemic and other market events. Our strong financial results are a reflection of this approach and our resilient business model. I am immensely proud of our achievements and want to thank every member of the DLL workforce who contributed to this success.”
Risk cost improvements
DLL stated that due to improved macro-economic conditions in 2021, the company was able to reverse previously booked provisions that were taken during the height of the pandemic to guard against anticipated future losses. As a result, total risk costs closed the year in a net positive position of €83m. This corresponds to minus 22 basis points of the average loan portfolio and is well below DLL's historical long-term average of plus 52 basis points.
The underlying financial performance of the portfolio continued to trend positively, with net income totalling €1.545bn, representing a 3% growth over the prior year. This was supplemented by a strong asset management income performance, as shortages of new equipment resulted in higher secondary market values being realised on used equipment sales.
Marc Dierckx, DLL CFO, commented: “I am very pleased with these results, which saw improvements across virtually all key financial metrics. Excluding the exceptional risk cost result and the significant uplift it had to net profits, the underlying performance of our business model remains robust and continues to provide a solid foundation for future growth.”
As regards prospects for the future, Van Kemenade sounded a note of cautious optimism, stating: “With Covid changing how our customers and workforce have conducted business over the past two years, we recognize that DLL needs to continue to evolve and adapt in order to stay positioned for future success.
“Looking ahead, we have bold plans to refresh our strategy by taking into account emerging trends and aiming for healthy growth, but also being mindful of the geo-political developments and economic environment in front of us. We are moving forward with cautious optimism, and with this solid foundation of performance plus our engaged global workforce, we remain very confident that the future will be bright.”
DLL has made the decision to permanently cease all new business activities in Russia and said its key focus is now being placed on the rundown of its Russian business. The company said it will continue to implement all required sanctions and are ready to process other measures as they are announced. The statement concluded: “DLL is shocked and saddened to witness the events occurring in Ukraine and the humanitarian crisis that is unfolding. Our hearts and thoughts remain with the people of Ukraine and with our work colleagues and customers who have close family and friends impacted by this crisis.”