Intrum - comment - 26Q3

Intrum delivered bad news this morning. The German servicing business needs a full restart. The bleak assessment comes as a surprise to the market, as servicing revenues are down and expenses up, squashing the division's contribution to EBITDA - some SEK 650m lower than forecast. As a reminder, this is the division that was still supposed to carry the growth only six months ago. One-offs are up significantly and the low portfolio purchases in Q326 look like cash management and stand in contrast to management's more upbeat tone on opportunities in this segment. Notably the cash from the sale of its 35% JV stake have come in, but that can't stop the bonds from repricing - and in this environment anyway. We are long and wrong these bonds and, since we got something wrong, may be looking for an exit now. The market may be looking at Lowell and find no support.