Riga, 2018-04-30 18:06 CEST (GLOBE NEWSWIRE) -- On key business indicators:
On financial results
Year 2017 for Capitalia group (further “Capitalia”) has been focused on improvements in operations. During the year total turnover of the company reached EUR 1,189 thousand, increasing by 30% compared to the previous year. Capitalia ended the financial year with a profit of EUR 25.6 thousand. Our profitability this year has suffered as a result of larger than expected provisions for doubtful loans, mostly in the Estonian market. Furthermore, due to sub-optimal legal structure we are reporting relatively high profit in the Lithuanian daughter company that leads to technical overpayment of the corporate income tax across the company. To avoid such situation in the future, we have started steps to create united Societas Europaea company as a result of which operations in Lithuania and Estonia will be structured as branches. During 2017 we have made a number of significant improvement in our organizational work, including strengthened our team of investment managers in Latvia and Estonia, systematized internal audit procedures, simplified and broadened our product range as well as updated our financing and monitoring procedures. Despite increasing turnover, we have kept similar balance sheet size compared to the previous year.
On developments of business activity
Capitalia’s mission since the foundation has been to provide financing to small and medium sized businesses in situations where bank financing is not suitable or nor available. During 2017 we have financed more than 500 companies for the total amount of EUR 10.1 million. Our most popular product continues to be traditional amortizing loan, which has around 88% share of our portfolio. Invoice purchasing (or factoring) still holds relatively small share of 12% of the loans. From autumn of 2017 we have started offering businesses advisory in attracting venture capital and business angel investments, based on our extensive experience and contacts in these fields. Capitalia will consider co-investments its own capital in such projects, but no more than 10% of the total balance sheet volume.
On corporate social responsibility
With Capitalia small and medium businesses are able to obtain financial resources in situations when they are rejected by banks or bank loan is not sufficient for their needs. Therefore, we fill an important void in the financial ecosystem by improving SME access to capital, as well as encouraging employment and entrepreneurship. In 2017 we have issued EUR 10.1 million of new loans to 525 companies in Latvia, Lithuania and Estonia. Apart from financing we have a mission to provide tools, forms and studies to small businesses on how to improve management and assist in daily operations. Such resources we provide for download through our corporate websites with over 1000 registered downloads recorded in 2017. In 2018 in association with Stockholm School of Economics in Riga we are planning a nationwide activity to promote business mentorship. Furthermore, we are planning to start support of young Baltic artists in partnership with organizers of Baltic Young Artist award.
On new markets
At the end of 2017 Capitalia employed 8 investment managers that serviced over 500 clients in the Baltic countries. Capitalia does not expect to enter any new markets during 2018, focusing instead our full attention to the growth in the Baltic States.
On future strategy
In 2018 our focus will be on growing the profitability of the company and increasing the portfolio size. Our aim is to grow the portfolio under management by at least 50% by the end of this year, with particular focus on financing medium size companies that are seeking capital of up to EUR 500,000. We will also continue working on further automation of evaluation and processing of loan applications for microloans of up to EUR 25,000. By offering finance raising services from venture capital, business angels and other financial investors, we seek to further strengthen our position as go-to source for companies in situations when alternative financing is required.
On differences in statements
According to audited results the net profit of Capitalia for the year 2017 was EUR 25,665 - smaller by EUR 10,542 than reported in non-audited results for the same period. The difference is mianly due to amendments in the provisions for the doubtful loans in Estonia.
On Capitalia
Capitalia funds small and medium enterprises in Latvia, Lithuania and Estonia. To date Capitalia has financed working capital and investment needs of more than 1000 companies investing over EUR 30 million in growth of these businesses.
Juris Grišins
Manager
Email: juris.grisins@capitalia.com
Phone: +371 2880 0880