Aktiv Kapital Reports Down Quarter, But Surge in Debt Purchasing

International debt purchasing and collection giant Aktiv Kapital ASA (Oslo Exchange: AIK) Friday reported results for the third quarter of 2007 marked by a drop in profit on an increase in revenues and a surge of debt buying activity.

For the third quarter, Oslo-based Aktiv reported net income of $11.8 million, a 13 percent decrease from net income reported in the same period a year ago. Revenues for the group came in at $71.4 million in the most recent quarter, up more than 9 percent from the $65.4 million reported last year.

Aktiv also reported increased activity in portfolio purchasing in the quarter. From July through September of this year, the company spent $54 million to purchase portfolios, a nearly 65 percent increase from the $32.8 million it spent in the third quarter a year ago and a 76 percent increase from debt purchasing activity in the second quarter of 2007.

In its earnings release, Aktiv Kapital broke out portfolio purchases by geographic region. In total, the company purchased around 294,000 accounts in the quarter, with 214,000 of those accounts belonging to consumers in the United Kingdom. The next most active area was Canada, with 69,000 accounts purchased with a face value of $390.5 million. Aktiv also purchased accounts in Germany, Austria, Sweden, Denmark, and Norway in the third quarter.

In the release, Aktiv’s board of directors said that portfolio purchasing should remain strong for the time being. “The pipeline for future purchases of portfolios is significant, and we continue to see a positive trend among financial institutions to either outsource or divest the collection of non-performing loans,” said the board.

Aktiv explained the drop in net income for the quarter as being related to increased payroll expenses across the group. Specifically, the company said that expansion in Spain, Canada, and the U.K. drove payrolls higher. Also, the company reported a surge in financial expenses reflecting a “net foreign exchange loss” of $3.1 million compared to a foreign exchange gain of $1.1 million in the third quarter of 2006.