reference document 2003 - Euler Hermes Kreditversicherungs-AG

Contribution to consolidated net income
Credit insurance contributed 138.7 million euros to consolidated net income, compared with 65.7 million euros in 2002
(reported data).
(In thousands of euros) 2003 2002 (reported)
Current income from credit insurance 238,413 126,010
Other non-underwriting income and expenses – 11,520 – 6,776.0
Duties and taxes – 86,056 – 44,353.2
Share of earnings from equity affiliates 3,069 2,276.7
Minority interests – 2,276 – 1,160.5
Other consolidation adjustments – 2,914 – 10,250.8
Contribution to consolidated income 138,717 65,746
FACTORING RESULTS
As well as the decline in turnover mentioned
earlier, the factoring business was
affected by the following factors in 2003:
– a 9.3% increase in net banking income
due to a rise in factoring commissions
and financing commissions net of
charges,
– tighter control of claims expenses thanks
to a better risk prevention policy, more
efficient claims management processes
and a strong increase in debt recoveries,
– a reduction in operating expenses, resulting
from job cuts and reduced utilisation
of outside services,
– the completion of a number of projects
designed to improve management efficiency,
– an exceptional loss. At the beginning of
March 2003, Eurofactor discovered it had
been embezzled by one of its clients for a
total of 20.3 million euros. The shareholders
were informed of this event at the
Euler Hermes’ Shareholders General
Meeting on 23 April 2003. The loss arising
from this fraud was charged, prorata to
the Group’s participating interest, for
10.9 million euros to ordinary income from
factoring in the consolidated financial
statements. After utilisation of the provi-
sion for customer risk and arrears, the
after-tax impact on consolidated income
was 4.7 million euros.
Despite the exceptional claim in 2003, the
factoring business made a positive contribution
to consolidated operating income of
7.4 million euros compared with a loss of
14.5 million euros in 2002.
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