Intrum Justitia to Shut Down Operations in Latvia and Lithuania

European accounts receivable management company Intrum Justitia Monday announced that it is shuttering its debt collection operations in Latvia and Lithuania.

“The Baltic markets are small and even though Intrum Justitia has been one of the leading actors in Latvia as well as Lithuania, we have had difficulties to capitalize on the economy of scales that comes with being a market leader,” says Rickard Westlund, Regional Managing Director Northern Europe. “Therefore we have chosen to focus our resources on countries where the prerequisites to grow and create value for clients and shareholders is better. In Estonia we have a stable client base, good profitability and a close cooperation with our Finnish subsidiary, which is why we chose to integrate the Estonian unit into our Finnish operations and under Finnish management.”

The Latvian and Lithuanian operations have around 30 employees and the two operations have revenues of approximately SEK 4 M annually ($580,000). In 2011 the operating loss for these operations is expected to amount to approximately SEK 5 M ($725,000). A cost of approximately SEK 10 M ($1.45 million) to terminate the operations will burden the result in region Northern Europe in the fourth quarter of 2011.

The work to close down the operations is expected to be finalized in the first quarter of 2012.

Intrum Justitia is one of Europe’s leading Credit Management Services (CMS) group, offering comprehensive services, including purchase of receivables. Founded in 1923, Intrum Justitia has some 3,100 employees in 20 markets. Consolidated revenues amounted to SEK 3.8 billion in 2010 ($550 million). Intrum Justitia AB is listed on NASDAQ OMX Stockholm since 2002.