DLL, global provider of asset-based financial solutions, delivered strong results for the 2021 business year, highlighted by exceptional net profits. The company recorded both portfolio and income growth during the year, while risk costs improved significantly due to more favorable economic conditions in key markets.
DLL recorded net profits of $693 million for 2021, which represented an increase of 226 percent from the prior year. This result was positively impacted by a significant improvement in risk costs as economic conditions improved in many key markets. When excluding currency movements, the company’s portfolio balance grew by 3 percent over the prior year and reached $42.3 billion.
“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,” said Carlo van Kemenade, CEO and Chairman of the Executive Board. “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.”
Significant Improvement in Risk Costs Further Enhance 2021 Performance
Due to improved macro-economic conditions in 2021, DLL 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 $98 million. This exceptional result 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 totaling $1.827 billion, which represented 3 percent growth over the prior year. This was supplemented by a strong Asset Management income performance, as shortages on new equipment resulted in higher secondary market values being realized on used equipment sales.
“I am very pleased with these results, which saw improvements across virtually all key financial metrics.” commented Marc Dierckx, CFO and Member of the Executive Board. “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.”
Looking Ahead with Cautious Optimism
“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,” said Van Kemenade. “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.”
Russia - Ukraine Conflict
“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. DLL has made the decision to permanently cease all new business activities in Russia and our entire focus is now being placed on the rundown of our Russian business. We will continue to implement all required sanctions and are ready to process other measures as they are announced.”