NEO Finance: interim financial information for the 3rd quarter of 2022


Interim financial information for Q3 2022 Vilnius | 2022-10-31

NEO Finance, Alta.

Confirmation of responsible persons within the company

October 31, 2022, Vilnius


We hereby confirm that to our knowledge, the financial statements for Q3 2022, drawn up in accordance with applicable accounting standards, give a true and fair view of the Company’s assets, liabilities, financial position and results, and that the report annual report presents a faithful image of the evolution and progress of the business as well as of the situation of the company, including a description of the main risks and uncertainties with which it is confronted.

Administrative Manager, NEO Finance AB

Head of Finance, NEO Finance AB

Evaldas Remeikis

Aivaras Bielskis



page 4

Basic company information

page 6

Overview of the financial situation of the Company

and operating profit

page 12

Financial statements for the period ended September 30, 2022

page 38

Evaldas Remeikis

Head of Administration

In the third quarter of 2022, all of our businesses grew in volume. Compared to the same quarter of last year, the amount of loans issued via the Paskolų klubas platform increased by 16%, the number of payment transactions by 30% and the amount of loans issued to SMEs via Finomark increased by 4.5. Importantly, the growth in business volumes was achieved while maintaining profitable operations, which is extremely rare among growing Fintech companies. In the third quarter of 2022, the company managed to increase both EBITDA profitability and pre-tax profitability, which increased by 17% and 38%, respectively, compared to the same quarter last year.

Like everyone else, we are currently working in a difficult economic and geopolitical situation. Consumer confidence is deteriorating due to high inflation, rising energy prices and interest rate hikes by the ECB. This can reduce the need to borrow for consumption, and can also reduce the volume of purchases in online stores. However, I believe that this period should not last long, because energy prices are falling, the state has announced, in the new budget, the compensation of energy prices for both the population and the businesses, and inflation should follow lower energy prices. Thus, in the near future, the negative impact on personal expenditure will be mainly due to the rise in EURIBOR interest rates following the ECB’s decisions to increase key rates. At the moment, we are seeing a slight decline in the activity of retail investors due to the war situation and other negative factors, but institutional investors are not reducing their investment volumes, in fact, they are doing the opposite. , which allows them to continue to increase their volumes while maintaining sufficient money supply.

So while the general market backdrop is negative, there are also positive signs in our performance. I think that, thanks to the rise in interest rates, the Paskolų Klubas is becoming more and more competitive in the consumer credit market compared to bank rates. It is possible that banks will be more aggressive in raising the price of consumer credit than investors in Paskolų Klubas, and that more customers with better credit ratings will be able to borrow through our intermediary on better terms. In addition, Paskolų Klubas platform’s advantageous pricing is currently attracting an increasing number of existing consumer borrowers with

with the aim of refinancing their loans by transferring them to Paskolų Klubas. Although the cost of loans on the platform has increased slightly, the prices offered by investors are still quite attractive. Thus, we will likely continue to maintain the growth of loans issued through the platform in the next quarter despite the unfavorable economic situation and the drop in consumer sentiment. It is important to note that the revenue generated during the quarter from the brokerage activities does not reflect the current revenue from the origination of the loans generated, as the revenue comes from loans originated on the platform in the previous months and years. . Consequently, the Company’s revenues are recognized with a significant time lag. During the year, the amount of brokerage fees to be received in the future increased by EUR

1.1 million, going from 6.68 million euros to 7.78 million euros, and from 0.42 million euros in Q3 compared to Q2 (against 7.36 million euros). This increase is not reflected in the Company’s income statement or balance sheet. As peer-to-peer lending is already profitable, even with a conservative profit calculation (based on brokerage fees collected rather than generated), the Company has already granted more than

EUR 120m of loans in Lithuania, with a loan portfolio of over EUR 50m. Additionally, the Company has

has invested more than 3 million euros in its own software (“in-house”) to manage its lending activity between individuals. Considering the investments made, the experience gained and the understanding that Lithuania is a very small market with limited scope for volume growth, the Board decided to prepare for expansion into a foreign market and to s launch there in the second half of next year. NEO Finance, AB has already started the preparatory work to develop

its consumer finance business in a major European Union country and will aim to do so in the second half of 2023.

Neopay’s transaction growth reached 30% in Q3 compared to the same quarter a year ago and reached a record number of transactions in a quarter with 5.184 million units. Currently, investments are focused on product development and the introduction of new services such as Buy Now Pay Later and POS Lending in the Lithuanian market, as well as the growth of the main service – payment initiation in foreign markets. . In addition, we have seen a growing interest from e-shops in the market for the “automated refunds” functionality. “The main task of Neopay’s business arm remains unchanged: to increase business volumes by expanding into EEA markets. To this end, Neopay’s payment method has been integrated with major banks in Croatia, in Bulgaria, Slovakia and Denmark and Neopay is now able to offer payment services It should be noted that Neopay still generates the bulk of its revenues in the Baltic markets, where competition is fierce, which translates by slower revenue growth than transactions.

Finomark’s loan volume increased by 4.45 times, for several reasons: a small comparison base (only EUR 181,000 of loans issued in the third quarter of 2021) and a greater focus on sales. The result of the loans issued via the platform in September is particularly pleasing, with loans issued in the amount of 569 thousand euros. Finomark is still in its infancy and we see an opportunity to maintain its strong growth if investors continue to actively fund loans and grow their investment portfolios. It is important to note that we are aware of the uncertainty in the economy in the short term and therefore loans are selected for funding with due care and responsibility to maintain the expected level.

non-performing loans and to offer investors the possibility of obtaining returns on investment of up to 10% by investing in short-term loans of up to 3 years.

The Company continues to invest significant resources and time in compliance management, ensuring the prevention of money laundering and terrorist financing, in order to comply with all legal and regulatory requirements. Every month, we update our internal processes, perform internal audits, implement recommendations and keep our information systems up to date. During the last quarter, we also devoted considerable time and IT resources to updating our international sanctions screening procedures.

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NEO Finance AB published this content on October 31, 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unmodified, on October 31, 2022 08:09:01 UTC.

Public now 2022

All news about NEO FINANCE, AB

Sales 2021 3.44M
3.42 million
3.42 million
Net income 2021 0.12 million
0.12 million
0.12 million
Net cash 2021 10.0 million
9.96 million
9.96 million
PER 2021 ratio 99.9x
2021 performance
Capitalization 10.2 million
10.1 million
10.1 million
EV / Sales 2020 2.01x
EV / Sales 2021 0.51x
# of employees 35
Floating 16.0%

Duration :

Period :

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Evolution of the income statement