Multitude Group publishes restated interim results for 2023 due to prior period adjustments and changes in presentation

Multitude Group publishes restated interim results for 2023 due to prior period adjustments and changes in presentation

 

Helsinki, 15 May 2024 – Multitude SE, a listed European FinTech company, offering digital lending and online banking services to consumers, small and medium-sized businesses, and other FinTechs (ISIN: FI4000106299, WKN: A1W9NS) (“Multitude”, “Company” or “Group”) announces that in 2023 the Group changed its accounting policies, particularly regarding the presentation of the financial statements as well as corrected certain identified errors. These changes led to the presentation of the 2023 financial statements in the new format, including the restatement of the comparative statements for the year ended on 31 December 2022.

 

This document aims to provide an overview of these changes, their reasons, and the impact into comparative interim periods of Q1 2023, H1 2023, and 9M 2023 (see sections a) and b)).

 

In addition to these changes, Multitude restructured its organisational structure as of 1 January 2024. As a result, there is a restatement of comparative interim disclosures of reportable segments for the comparative periods of Q1 2023, H1 2023, 9M 2023 and full year 2023 (see section c). 

 

a) Change in accounting policy - Adoption of new presentation:

In 2023, the Group undertook a strategic initiative to enhance the presentation of its financial statements, with the aim of providing reliable and more relevant information about the Group’s financial position and performance, aligning the presentation of primary statements with the common practice within the financial industry. As a result, the Group, starting with the financial year ended on 31 December 2023:

 

• changed the presentation of the statement of financial position from current / non-current classification to presentation based on the order of liquidity;
• has restructured the statement of profit or loss to present the net interest income, net fair value and foreign exchange gains and losses and other items;
• made corresponding changes in the presentation of the statement of cash flows, to align it with the financial industry and to include the cash flows of operating financial assets and financial liabilities in the cash flows from operating activities in line with IAS 7.

 

These adjustments need to be read in conjunction with the annual consolidated financial statements for 2023.

 

b) Correction of prior period errors:

The following corrections have been made:

 

1. Inclusion of collection costs in the calculation of expected credit losses

Previously, the Group recognised collection costs as incurred and presented them in general and administrative expense. Debt collection costs are considered incremental and directly attributable to the recovery of cash flows of the granted loans in the event of a default, and as such, they should rather be incorporated into the estimate of the expected credit losses. After the correction, debt collection costs are included in the calculation of expected credit losses by incorporating them in the net expected cash flows of loans to customers to which the collection costs directly relate to.

 

2. Classification of reminder fees as interest income

The Group has revised its treatment of reminder fees. Historically, these fees have been classified as fee and commission income in the statement of profit or loss and accounted for under IFRS 15. Reminder fees are a standard feature of loans to customers, and they are collected from the inception of the loan contract over the lifetime of loan similarly to interest. From the financial year ended 31 December 2023 onwards, the Group accounts for these fees in line with IFRS 9 and factors the reminder fees in the calculation of interest income by applying the effective interest method.

 

3. Scoring costs

Scoring costs consist of credit information, credit rating and similar checks conducted when a client applies for a loan or product and reaches a certain stage in this process. Historically, scoring costs have been recognised as incurred and presented in general and administrative expense. However, whenever such scoring costs relate to a loan which is granted to the client, the costs should be treated as a directly attributable transaction cost to such loan and should be included in the loan balance at inception and in the calculation of the effective interest rate of that loan, thus decreasing the interest income. This restatement only applies to scoring costs related to loans issued.

 

These changes, together with any potential impact in recognised deferred taxes, have been applied consistently, by adjusting the comparative period and the opening balances for the earliest period presented for each affected financial statement line item.

 

The following tables show the restatement of consolidated statements of financial position for interim periods of Q1 2023, H1 2023 and 9M 2023 due to the change in accounting policy (a) and correction of prior period errors (b).

 

Restatement of condensed interim consolidated statement of financial position for Q1 2023

EUR ’000   Reported 31 March 2023 Adjustment amount Adjustment number Restated 31 March 2023 Old FSLI New FSLI ASSETS ASSETS         Non-current assets
            Deferred tax assets
  Deferred tax assets
  6,817 394 6 7,211 Loans to customers
  Loans to customers 107,897 401,837 1, 5 509,734 Other non-current financial assets
  Debt investments 32,061 (7,494) 3 24,567 Current assets           Loans to customers Loans to customers 404,167 (404,167) 1 - Other current financial assets Other financial assets 17,185 5,275 2, 3 22,460 Prepaid expenses and other current assets
  Prepaid expenses and other assets 1,004 2,218 2 3,222 Total assets Total assets 838,527 (1,936) - 836,591 EQUITY EQUITY         Retained earnings
  Retained earnings
  78,561 (1,936) 4, 5 76,625 Total equity Total equity 183,401 (1,936) - 181,465 LIABILITIES LIABILITIES         Non-current liabilities           Deposits from customers
  Deposits from customers
  123,639 460,767 6, 9 584,406 Lease liabilities
  Lease liabilities
   2,670  1,551 7  4,221 Current liabilities           Deposits from customers Deposits from customers 457,118 (457,118) 6 - Lease liabilities
  Lease liabilities
  1,551 (1,551) 7 - Trade payables
  Provisions, accruals and other liabilities
  6,610 10,395 8, 9 17,005 Accruals and other current liabilities
  Provisions, accruals and other liabilities
  14,044 (14,044) 8 - Total liabilities Total liabilities 655,126 - - 655,126 Total equity and liabilities Total equity and liabilities 838,527 (1,936) - 836,591

 

Description of adjustments to condensed interim consolidated statement of financial position for Q1 2023

Number Amount
 EUR ’000 Description 1 404,167 Current and non-current loans to customers have been merged due to change of the presentation of consolidated statement of financial position based on the order of liquidity. 2 2,218 Part of the prepaid expenses (which in economic terms should be presented as financial assets, such as receivables under the depositor compensation scheme) has been reclassified into other financial assets financial statement line item for a more accurate presentation of information. 3 7,494 Current portion of debt investments has been reclassified from other financial assets line item to debt investments line item. 4 394 An additional deferred tax asset generated as a result of compliance with IAS 8 has been recognised as result of increased ECL provision. 5 2,330 An additional ECL generated as a result of compliance with IAS 8 has been recognised due to collection costs classification as part of ECL. 6 457,118 Current and non-current deposits from customers have been merged due to change of the presentation of consolidated statement of financial position based on the order of liquidity. 7 1,551 Current and non-current lease liability have been merged due to change of the presentation of consolidated statement of financial position based on the order of liquidity. 8 14,044 Trade payables line item has been merged with accruals and other current liabilities line item and renamed to provisions, accruals and other liabilities. 9 3,649 Interest accrual liability has been reclassified from provisions, accruals and other liabilities to deposit from customers.

 

Restatement of condensed interim consolidated statement of financial position for H1 2023

EUR ’000   Reported 30 June 2023 Adjustment amount Adjustment number Restated 30 June 2023 Old FSLI New FSLI ASSETS ASSETS         Non-current assets
            Deferred tax assets Deferred tax assets 6,536 394 5 6,930 Loans to customers
  Loans to customers 109,750 408,794 1, 6 518,544 Other non-current financial assets
  Debt investments                          41,809                           (3,424) 3, 4 38,385 Investments accounted for using the equity method Investments accounted for using the equity method  1,012  16 3 1,028 Current assets           Loans to customers Loans to customers  411,067  (411,067) 1 - Other current financial assets Other financial assets  12,029  4,662 2, 4 16,691 Prepaid expenses and other current assets
  Prepaid expenses and other assets  4,411  (1,254) 2 3,157 Total assets Total assets  826,512  (1,879)   824,633 EQUITY EQUITY         Retained earnings
  Retained earnings
   78,226  (1,879) 5, 6 76,347 Total equity Total equity  181,501  (1,879)   179,622 LIABILITIES LIABILITIES         Non-current liabilities           Deposits from customers
  Deposits from customers
   149,206  423,922 7, 10 573,128 Lease liabilities
  Lease liabilities
   3,649  1,916 8 5,565 Current liabilities           Deposits from customers Deposits from customers  418,214  (418,214) 7 - Lease liabilities
  Lease liabilities
   1,916  (1,916)  8 - Trade payables
  Provisions, accruals and other liabilities
   6,703  10,250  9, 10  16,953 Accruals and other current liabilities
  Provisions, accruals and other liabilities
   15,958  (15,958)  9 - Total liabilities Total liabilities  645,011  - -  645,011 Total equity and liabilities Total equity and liabilities  826,512  (1,879) -  824,633

 

Description of adjustments to condensed interim consolidated statement of financial position for H1 2023

Number Amount
EUR ’000 Description 1 411,067 Current and non-current loans to customers have been merged due to change of the presentation of consolidated statement of financial position based on the order of liquidity. 2 1,254 Part of the prepaid expenses (which in economic terms should be presented as financial assets, such as receivables under the depositor compensation scheme) has been reclassified into other financial assets financial statement line item for a more accurate presentation of information. 3 16 Reclassification of capitalised cost incurred to purchase investment in Sortter from Debt investment in Investment accounted via equity method 4 3,408 Current portion of debt investments has been reclassified from other financial assets line item to debt investments line item. 5 394 An additional deferred tax asset generated as a result of compliance with IAS 8 has been recognised as result of increased ECL provision. 6 2,273 An additional ECL generated as a result of compliance with IAS 8 has been recognised due to collection costs classification as part of ECL. 7 418,214 Current and non-current deposits from customers have been merged due to change of the presentation of consolidated statement of financial position based on the order of liquidity. 8 1,916 Current and non-current lease liability have been merged due to change of the presentation of consolidated statement of financial position based on the order of liquidity. 9 15,958 Trade payables line item has been merged with accruals and other current liabilities line item and renamed to provisions, accruals and other liabilities. 10 5,708 Interest accrual liability has been reclassified from provisions, accruals and other liabilities to deposit from customers.

 

Restatement of condensed interim consolidated statement of financial position for 9M 2023

EUR ’000   Reported 30 September 2023 Adjustment amount Adjustment number Restated 30 September 2023  Old FSLI  New FSLI ASSETS ASSETS         Non-current assets
            Deferred tax assets
  Deferred tax assets
  6,348 394 6 6,742 Loans to customers
  Loans to customers 111,193 434,831 1, 5 546,024 Other non-current financial assets
  Debt investments 43,368 (3,046) 3 40,322 Current assets           Loans to customers Loans to customers 437,046 (437,046) 1 - Other current financial assets Other financial assets 11,604 1,744 2, 3 13,348 Prepaid expenses and other current assets
  Prepaid expenses and other assets 1,477 1,302 2 2,779 Total assets Total assets 819,534 (1,821) - 817,713 EQUITY Equity         Retained earnings
  Retained earnings
  82,798 (1,821) 4, 5 80,977 Total equity Total equity 184,368 (1,821) - 182,547 LIABILITIES LIABILITIES         Non-current liabilities           Deposits from customers
  Deposits from customers
  192,164 364,148 6, 9 556,312 Lease liabilities
  Lease liabilities
  3,353 1,942 7 5,295 Current liabilities           Deposits from customers Deposits from customers 355,504 (355,504) 6 - Lease liabilities
  Lease liabilities
  1,942 (1,942) 7 - Trade payables
  Provisions, accruals and other liabilities
  10,615 10,953 8, 9 21,568 Accruals and other current liabilities
  Provisions, accruals and other liabilities
  19,597 (19,597) 8 - Total liabilities Total liabilities 635,167 - - 635,167 Total equity and liabilities Total equity and liabilities 819,534 (1,821) - 817,713

 

Description of adjustments to condensed interim consolidated statement of financial position for 9M 2023

Number Amount
EUR ’000 Description 1 437,046 Current and non-current loans to customers have been merged due to change of the presentation of consolidated statement of financial position based on the order of liquidity. 2 1,302 Part of the prepaid expenses (which in economic terms should be presented as financial assets, such as receivables under the depositor compensation scheme) has been reclassified into other financial assets financial statement line item for a more accurate presentation of information. 3 3,046 Current portion of debt investments has been reclassified from other financial assets line item to debt investments line item. 4 394 An additional deferred tax asset generated as a result of compliance with IAS 8 has been recognised as result of increased ECL provision. 5 2,215 An additional ECL generated as a result of compliance with IAS 8 has been recognised due to collection costs classification as part of ECL. 6 355,504 Current and non-current deposits from customers have been merged due to change of the presentation of consolidated statement of financial position based on the order of liquidity. 7 1,942 Current and non-current lease liability have been merged due to change of the presentation of consolidated statement of financial position based on the order of liquidity. 8 19,597 Trade payables line item has been merged with accruals and other current liabilities line item and renamed to provisions, accruals and other liabilities. 9 8,644 Interest accrual liability has been reclassified from provisions, accruals and other liabilities to deposit from customers.

 

The following tables show the restatement of consolidated statements of profit or loss for interim periods of Q1 2023, H1 2023 and 9M 2023 due to the change in accounting policy (a) and correction of prior period errors (b).

 

Restatement of condensed interim consolidated statement of profit or loss for Q1 2023

EUR ’000   Reported Q1 2023 Adjustment amount Adjustment number Restated Q1 2023 Old FSLI New FSLI Interest revenue
  Interest income
   53,248
   988
   2, 6, 7, 9
   54,236
  Fees
  Fee and commission income
   774  (772)  6  2 Impairment loss on loans to customers
  Impairment loss on loans to customers
   (19,817)  (1,062)  3, 4  (20,879) Bank and lending costs
  General and administrative expense  (3,044)  3,044  1 - Selling and marketing expense
  Selling and marketing expense
   (3,309)  (61) 11  (3,370) General and administrative expense
  General and administrative expense
   (6,160)  (2,881)  1, 3, 7, 8, 10, 11  (9,041) Profit before interests and taxes (EBIT)
  Profit before interest expense and taxes (EBIT)
   9,607  (744)    8,863 Finance income
  Interest income
   320
   (320)
   2
  - Finance costs Interest expense  (7,043)  3,130  5, 8, 9  (3,913) Finance costs
  Fair value and foreign exchange gains and losses
  -  (1,918)  5  (1,918) Profit before income tax
  Profit before income tax
   2,885  148    3,033 Income tax expense
  Income tax expense
   (662)
   (90)
   10
   (752)
  Profit for the period
  Profit for the period
   2,223  58    2,281

 

Description of adjustments to condensed interim consolidated statement of profit or loss for Q1 2023

Number Amount
  EUR ’000 Description 1 3,044 Bank and lending costs line item has been merged with general and administrative expenses. 2 320 Finance income in relation to interest from loans to related parties and deposits with other banks has been merged with the interest income financial statement line item. 3 1,120 Invoicing and collection costs have been reclassified from general and administrative expense to impairment loss on loans to customers financial statement line item. 4 58 Impairment loss adjustment due to change in ECL estimate for collection costs. 5 1,918 A new financial statement line item titled fair value and foreign exchange losses has been separated from interest expense previously reported under finance cost line item. 6 772 Reminder fee has been reclassified from fee and commission income to interest income financial statement line item. 7 118 Scoring costs have been reclassified from general and administrative expense to interest income as part of effective interest income. 8 1,225 Depositor compensation scheme contributions have been reclassified from interest expense to general and administrative expense. 9 13 Finance cost has been renamed to interest expense and reclassified to net interest income. 10 90 Withholding tax on consumer loans has been reclassified from general and administrative expense to income tax expense. 11 61 Bank and lending costs related to loan handling costs have been merged with general and administrative expense.

 

 

Restatement of condensed interim consolidated statement of profit or loss for H1 2023

EUR ’000   Reported H1 2023 Adjustment amount Adjustment number Restated
H1 2023  Old FSLI  New FSLI Interest revenue
  Interest income
   108,033  2,053  2, 6, 7, 9
   110,086 Fees
  Fee and commission income
   1,495  (1,487)  6  8 Impairment loss on loans to customers
  Impairment loss on loans to customers
   (40,197)  (2,012)  3, 4  (42,209) Bank and lending costs
  General and administrative expense  (5,960)  5,960  1 - Selling and marketing expense
  Selling and marketing expense
   (7,044)  (120) 11  (7,164) General and administrative expense
  General and administrative expense
   (11,191)  (4,267)  1, 3, 7, 8, 10, 11  (15,458) Profit before interests and taxes (EBIT)
  Profit before interest expense and taxes (EBIT)
   20,909  127 -  21,047 Finance income
  Interest income
   771  (771)  2
   - Finance costs Interest expense  (12,346)  3,514  5, 8, 9  (8,832) Finance costs
  Fair value and foreign exchange gains and losses
   -  (2,563)  5  (2,563) Profit before income tax
  Profit before income tax
   9,346  307 -  9,653 Income tax expense
  Income tax expense
   (1,865)  (192)  10
   (2,057) Profit for the period
  Profit for the period
   7,481  115 -  7,596

 

Description of adjustments to condensed interim consolidated statement of profit or loss for H1 2023

Number Amount
  EUR ’000 Description 1 5,960 Bank and lending costs line item has been merged with general and administrative expenses. 2 771 Finance income in relation to interest from loans to related parties and deposits with other banks has been merged with the interest income financial statement line item. 3 2,127 Invoicing and collection costs have been reclassified from general and administrative expense to impairment loss on loans to customers financial statement line item. 4 115 Impairment loss adjustment due to change in ECL estimate for collection costs. 5 2,563 A new financial statement line item titled fair value and foreign exchange losses has been separated from interest expense previously reported under finance cost line item. 6 1,487 Reminder fee has been reclassified from fee and commission income to interest income financial statement line item. 7 235 Scoring costs have been reclassified from general and administrative expense to interest income as part of effective interest income. 8 981 Depositor compensation scheme contributions have been reclassified from interest expense to general and administrative expense. 9 30 Finance cost has been renamed to interest expense and reclassified to net interest income. 10 192 Withholding tax on consumer loans has been reclassified from general and administrative expense to income tax expense. 11 120 Bank and lending costs related to loan handling costs have been merged with general and administrative expense.

 

Restatement of condensed interim consolidated statement of profit or loss for 9M 2023

EUR ’000   Reported 9M 2023 Adjustment amount Adjustment number Restated 9M 2023  Old FSLI  New FSLI Interest revenue
  Interest income
  165,222 3,236  2, 6, 7, 9 168,458 Fees
  Fee and commission income
  2,171 (2,124)  6 47 Impairment loss on loans to customers
  Impairment loss on loans to customers
  (61,452) (2,920)  3, 4 (64,372) Bank and lending costs
  General and administrative expense (8,913) 8,913  1 - Selling and marketing expense
  Selling and marketing expense
  (10,821) (176)  11 (10,997) General and administrative expense
  General and administrative expense
  (16,708) (6,232)  1, 3, 7, 8, 10 (22,940) Profit before interests and taxes (EBIT)
  Profit before interest expense and taxes (EBIT)
  32,470 697   33,201 Finance income
  Interest income
  1,428 (1,428)  2 - Finance costs Interest expense (18,781) 4,574  5, 8, 9 (14,207) Finance costs
  Fair value and foreign exchange gains and losses
  - (3,670)  5 (3,670) Profit before income tax
  Profit before income tax
  15,151 173   15,324 Income tax expense
  Income tax expense
  (2,796) -   (2,796) Profit for the period
  Profit for the period
  12,355 173   12,528

 

Description of adjustments to condensed interim consolidated statement of profit or loss for 9M 2023

Number Amount  EUR ’000 Description 1 8,913 Bank and lending costs line item has been merged with general and administrative expenses. 2 1,428 Finance income in relation to interest from loans to related parties and deposits with other banks has been merged with the interest income financial statement line item. 3 3,093 Invoicing and collection costs have been reclassified from general and administrative expense to impairment loss on loans to customers financial statement line item. 4 173 Impairment loss adjustment due to change in ECL estimate for collection costs. 5 3,670 A new financial statement line item titled fair value and foreign exchange losses has been separated from interest expense previously reported under finance cost line item. 6 2,124 Reminder fee has been reclassified from fee and commission income to interest income financial statement line item. 7 353 Scoring costs have been reclassified from general and administrative expense to interest income as part of effective interest income. 8 940 Depositor compensation scheme contributions have been reclassified from interest expense to general and administrative expense. 9 36 Finance cost has been renamed to interest expense and reclassified to net interest income. 10 176 Bank and lending costs related to loan handling costs have been merged with general and administrative expense.

 

The following tables show the restatement of consolidated statements of cash flows for interim periods of Q1 2023, H1 2023 and 9M 2023 due to the change in accounting policy (a) and correction of prior period errors (b).

 

Restatement of condensed interim consolidated statement of cash flows for Q1 2023

EUR ’000   Reported Q1 2023 Adjustment amount Adjustment number Restated Q1 2023 Old FSLI New FSLI Profit for the year Profit for the period 2,223 58 1 2,281 Adjustments for: Adjustments for:         Impairments on loans Impairment loss on loans to customers 19,817 1,063 1, 4, 2 20,879 Depreciation and amortisation Depreciation and amortisation 3,416 265 3 3,681 Finace costs, net Net interest income 5,505 (55,828) 6 (50,323) Fair value and foreign exchange gains and losses Fair value and foreign exchange gains and losses   1,918 5, 11 1,918 Tax on income from operations Income tax expense 662 90 4 752 Other adjustments Other adjustments 388 (265) 3 122 Working capital changes: Changes in operating assets:         Increase (-) / Decrease (+) in current receivables Increase (-) / Decrease (+) in Other Assets (4,399) (1,633) 12, 14, 16 (6,032)   Increase (-) / Decrease (+) in Loans to Customers - (21,151) 2, 10, 15, 17 (21,151)   Increase (-) / Decrease (+) in Other Financial Assets - (3,460) 18 (3,460)   Increase (-) / Decrease (+) in Derivative Financial Instruments (net) - 994 8, 12 994 Changes in operating liabilities: Changes in operating liabilities:         Deposits from customers Increase (+) / decrease (-) in Deposits from customers - 80,847 7, 14 80,847 Increase (+) / Decrease (-) in trade payables and other liabilities Increase (+) / decrease (-) in Other liabilities (3,339) 4,767 16, 17, 18 (1,429) Interest paid Interest paid (2,623) 697 13  (1,926) Interest received Interest received 91  48,313 6, 13, 15  48,405 Income taxes paid Income taxes paid 159 - - 159 Movements in gross portfolio   (23,222) 23,222 10 - Net cash from operating activities Net cash from operating activities (1,322) 79,896 - 78,575 Cash flows from investing activities Cash flows from investing activities         Proceeds from sale of investments and other assets Increase (-) / Decrease (+) in Derivative Financial Instruments (net) 1,233 (1,233) 8 - Purchase of tangible and intangible assets Purchase of tangible assets - (242) 9 (242) Purchase of tangible and intangible assets Purchase of intangible assets (2,642) 242 9 (2,400) Net cash used in investing activities Net cash used in investing activities (1,409) (1,233) 26 (2,642) Cash flows from financing activities Cash flows from financing activities         Perpetual bonds interest Repayment of perpetual bonds interest (1,365) - - (1,365) Repayment of finance lease liabilities Repayment of lease liabilities (562) - - (562) Deposits from customers Increase (+) / decrease (-) in Deposits from customers 79,204 (79,204) 7 - Net cash used in financing activities Net cash used in financing activities 77,277 (79,204) 7 (1,928) Cash and cash equivalents at beginning of the period Cash and cash equivalents at beginning of the period 153,325 - - 153,326 Exchange gains/(losses) on cash and cash equivalents Exchange gains/(losses) on cash and cash equivalents (701) 541 11 (160) Net increase/(decrease) in cash and cash equivalents Net increase/decrease in cash and cash equivalents 74,546 (541) 11 74,005 Cash and cash equivalents at the end of the period Cash and cash equivalents at the end of the period 227,171 - - 227,171

 

 

Description of adjustments to condensed interim consolidated statement of cash flows for Q1 2023

Number Amount
 EUR ’000 Description 1 58 Change in accounting treatment of collection costs that led to increase in ECL provision for the loans to customers. 2 1,210 Invoicing and collection cost has been reclassified from general and administrative expense to impairment loss on loans to customers and hence deducted from movement in loans to customers. 3 265 Impairment on non-financial assets has been reclassified from other adjustments line. 4 90 An adjustment has been made regarding the change in accounting treatment of collection costs that led to increase in ECL provision for the loans to customers, resulting in corresponding deferred tax implications on the change in the amount of deferred tax asset. 5 2,459 Finance cost, net has been split between net interest income and foreign exchange gain or loss in the statement of profit or loss. 6 53,369 Finance cost, net has been split between net interest income and Fair value and foreign exchange gains and losses. 7 79,204 Reclassification of movement in deposits from customers to operating cash flow with subsequent renaming of line item. 8 1,233 Reclassification of changes in derivative assets and liabilities. 9 242 Separation of purchase of tangible assets from purchase of intangible assets. 10 23,222 Reclassification of movement of loans to customers with subsequent renaming of line item. 11 541 Reclassification of part of exchange gains/(losses) on cash and cash equivalents to fair value and foreign exchange gains and losses. 12 239 Reclassification of part of accrued gain or loss from derivatives from other assets to movement in derivatives. 13 697 Adjustment of net interest income with netting of interest received and interest paid line items. 14 1,643 Reclassification of change in prepayment related to issue costs to loans to customers. 15 4,359 Separation of movement on interest accrual from loans to customers. 16 229 Netting of other liabilities with other assets to match movement on the statement of financial position. 17 1,078 Reclassification of movements in other liabilities related to unallocated payments to loans to customers to match movement on the statement of financial position. 18 3,460 Netting of other liabilities to other financial assets to match movement on the statement of financial position.

 

Restatement of condensed interim consolidated statement of cash flows for H1 2023

EUR ’000   Reported H1 2023 Adjustment amount Adjustment number Restated H1 2023 Old FSLI New FSLI Profit for the year Profit for the period 7,481 115 1 7,596 Adjustments for: Adjustments for:         Impairments on loans Impairment loss on loans to customers 40,197 2,013 1, 2 42,210 Depreciation and amortisation Depreciation and amortisation 7,171 419 3 7,590 Finace costs, net Net interest income 10,613 (111,867) 5, 6 (101,254) Fair value and foreign exchange gains and losses Fair value and foreign exchange gains and losses   2,563 5, 11 2,563 Tax on income from operations Income tax expense 1,865 192 4 2,057 Other adjustments Other adjustments 704 (419) 3 286 Working capital changes: Changes in operating assets:         Movements in gross portfolio Increase (-) / Decrease (+) in Loans to Customers 9,291 (60,582) 10, 12, 14, 16, 17 (51,291)   Increase (-) / Decrease (+) in Other Financial Assets   (17,279) 2, 4, 15, 17, 19 (17,277)   Increase (-) / Decrease (+) in Derivative Financial Instruments (net)   230 18 230   Increase (-) / Decrease (+) in Other Assets   (198)  8, 12 (198) Changes in operating liabilities: Changes in operating liabilities:         Deposits from customers Increase (+) / decrease (-) in Deposits from customers - 69,750 7, 14 69,750 Increase (+) / Decrease (-) in trade payables and other liabilities Increase (+) / decrease (-) in Other liabilities (2,288) 3,665 16, 18 1,377 Interest paid Interest paid (4,004) (671) 13 (4,675) Interest received Interest received 457 99,209 6, 13, 15 99,666 Income taxes paid Income taxes paid (486) - - (486) Movements in gross portfolio Increase (-) / Decrease (+) in Loans to Customers (65,323) 65,323 10 - Net cash from operating activities Net cash from operating activities 5,678 52,463 - 58,143 Cash flows from investing activities Cash flows from investing activities         Proceeds from sale of investments and other assets Increase (-) / Decrease (+) in Derivative Financial Instruments (net) (21) 21 8 - Proceeds from sale of investments and other assets Increase (-) / Decrease (+) in Derivative Financial Instruments (net) (12,800) 12,800 19 - Purchase of tangible and intangible assets Purchase of tangible assets - 146 9 146 Purchase of tangible and intangible assets Purchase of intangible assets (4,863) (146) 9 (5,009) Net cash used in investing activities Net cash used in investing activities (18,700) 12,821  45 (5,879) Cash flows from financing activities Cash flows from financing activities         Perpetual bonds interest Repayment of perpetual bonds interest (2,845)     (2,845) Repayment of finance lease liabilities Repayment of lease liabilities (1,104) - - (1,104) Deposits from customers Increase (+) / decrease (-) in Deposits from customers 66,002 (66,002) 7 - Net cash used in financing activities Net cash used in financing activities 57,589 (66,002)  7 (8,413) Cash and cash equivalents at beginning of the period Cash and cash equivalents at beginning of the period 153,325 - - 153,326 Exchange gains/(losses) on cash and cash equivalents Exchange gains/(losses) on cash and cash equivalents (1,186) 718 11 (469) Net increase/(decrease) in cash and cash equivalents Net increase/decrease in cash and cash equivalents 44,568 (718) 11 43,850 Cash and cash equivalents at the end of the period Cash and cash equivalents at the end of the period 196,707 - - 196,707

 

 

Description of adjustments to condensed interim consolidated statement of cash flows for H1 2023

Number Amount
EUR ’000 Description 1 115 Change in accounting treatment of collection costs that led to increase in ECL provision for the loans to customers. 2 2,128 Invoicing and collection cost has been reclassified from general and administrative expense to impairment loss on loans to customers and hence deducted from movement in loans to customers. 3 419 Impairment on non-financial assets has been reclassified from other adjustments line. 4 192 An adjustment has been made regarding the change in accounting treatment of collection costs that led to increase in ECL provision for the loans to customers, resulting in corresponding deferred tax implications on the change in the amount of deferred tax asset. 5 3,281 Finance cost, net has been split between net interest income and foreign exchange gain or loss in the statement of profit or loss. 6 108,586 Finance cost, net has been split between net interest income and Fair value and foreign exchange gains and losses. 7 66,002 Reclassification of movement in deposits from customers to operating cash flow with subsequent renaming of line item. 8 21 Reclassification of changes in derivative assets and liabilities. 9 146 Separation of purchase of tangible assets from purchase of intangible assets. 10 65,323 Reclassification of movement of loans to customers with subsequent renaming of line item. 11 718 Reclassification of part of exchange gains/(losses) on cash and cash equivalents to fair value and foreign exchange gains and losses. 12 177 Reclassification of part of accrued gain or loss from derivatives from other assets to movement in derivatives. 13 671 Adjustment of net interest income with netting of interest received and interest paid line items. 14 3,748 Reclassification of change in prepayment related to issue costs to loans to customers. 15 10,048 Separation of movement on interest accrual from loans to customers. 16 3,895 Netting of other liabilities with other assets to match movement on the statement of financial position. 17 12,207 Reclassification of movements in other liabilities related to unallocated payments to loans to customers to match movement on the statement of financial position. 18 230 Netting of other liabilities to other financial assets to match movement on the statement of financial position. 19 12,800 Reclassification of debt investment purchase from purchase of non-current financial investments to other financial assets.

 

 

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