I would like to warmly welcome all of you to today's conference call. The purpose of it is to discuss KRUK's third quarter results. My name is Marta Jeżewska-Wasilewska, and I represent WOOD & Company, the host of this call. Now, with no further delay, let me hand over to Mr. Michal Zasępa, CFO of the company. Michal?
Marta, thank you very much. Good afternoon, and thank you very much for joining this call. Thank you for your interest in the company. I'll make the presentation based on the document which is available on our website. So I'll be referring to the slides, and you may follow it on your screens. This is a very nice moment for me. The results are great. This year results are excellent. KRUK has earned PLN 565 million in the nine months of 2021, which is an absolute record. It's PLN 230 million more than in the second best year, 2018.
It's a new era for us, an era in which KRUK flies much higher than ever before. The good information is that we want to stay at this height, at this altitude for the following years. We are observing very good trends in this year, which still continue in Q4. The business, this result, the great result is based on strong fundamentals of our back book recoveries, which in practice, KRUK has been able to for another quarter be profitable in all countries where we operate, with increasing and positive contribution from new countries of Italy and Spain. Not only do we see a continuous, very strong trend on recoveries on our back book, but we also have accelerated new investments.
Over PLN 900 million invested this year. Some of the analysts say it will be a record year with maybe as much as PLN 1.5 billion investments, to which we say we'll try to fight for that result. We are indeed in a very good situation, because such big investments will also be very good news for the next couple of years when cash flows from them will be built. We're back to high profitability on equity. Trailing rolling ROE is at 26%. The business outperformed on earnings per share. They are at about PLN 30. There is money to reinvest.
There's also money to share with the shareholders, when we'll be deciding about next dividend. The business grows its volume nicely. The balance sheet amount of portfolio carried is now at PLN 4.5 billion, again a record. We achieved all that with one of the lowest industry levels of indebtedness. The net debt to cash EBITDA is 1.5 x at the end of the Q3, and 0.9 if you look at net debt to core equity. Which again means good news, because we have a lot of space to grow investments if we find good opportunities.
There are opportunities, and especially, we are very happy with what happened in Poland, where we significantly increased our market share, and are able to earn more than ever before. If you look at slide number four, there is one more important information. I believe it was last week, European Parliament published a directive on the credit servicers on NPLs, which we believe is an important step validating the industry as a very important part of the financial system, which will enable for this industry to be seen as more credible, more transparent, and eventually will foster development of the industry, we believe.
This is future and expectation because this directive will now need to be implemented within the next two years in each of the European Union countries. Of course there's a lot of details to be resolved on the local level, but we see it as a very good sign that the legislation on the European level sees our industry as an important element that requires some regulation aimed at enlarging the business. If you now look at slide number eight, you see the segment analysis of where the KRUK invested and earned the money. You can see that recoveries totaled about PLN 1.6 billion. Overall, we're very happy with this level of recoveries.
That was on the total a few percent above our ambitious operating target, and somewhat more above the accounting period when you look at this. The results were still outstanding in Romania, in Poland. They were also very good in Italy and Spain. In Spain, they were very good on the retail business, but they were below or significantly below plan on corporate portfolio, which we decided to write off. There was also some negatives on the corporate portfolio in Romania, which also was written down. That is a very small problem compared to the big upside we see on the consumer and secured part of the business, representing well over 80% of the total book.
We are not worried about it. We treat this as a one-off event, which really does not have impact on the overall outlook for the business. EBITDA, if you look at this line, total PLN 744 million, and it was Poland that generated more than 50% of it. Excellent performance of Romanian business, over PLN 200 million. With very good news, as Italy continued its good trend of growth, PLN 77 million of EBITDA. That's a visible third strong engine for KRUK profitability already. Spain did okay with PLN 17 million, but it carries over a strong PLN 10 million of negative revaluation. If it wasn't for that, Spain performance would also be very good. Last but not least, other markets performed very well.
If you look at 2020 numbers, they doubled its results, PLN 22 million. If you look at expenditures on debt portfolios, this PLN 900 million came mostly from Poland, over PLN 460 million. We're very happy with Romania, where the market is tough. There's not many portfolios to sell, but we still are able to place money there to work with this PLN 119 million. Very good level of investment in Italy and Spain, PLN 200 million and PLN 130 million, respectively. Overall, it's a well-diversified situation where we no longer are only on two engines that are profitable, but five engines that are profitable.
We're building future that this growth in all of those countries should be visible in the future. As you see, the expenditures are also not in one or two countries only. More detail on Poland. As I told you, very good trend of recoveries across all the asset classes. This trend continues also in Q4. Unfortunately, COVID situation has worsened in Poland. We don't see any new regulation or affect the recoveries, but we are also, of course, cautious. I think in COVID terms, we are ahead of some tough times for the next couple of months, but it doesn't look like the government is imposing countrywide lockdown, nor we are aware of any regulation that would hit slow down business here.
Hopefully the business will not suffer. But people-wise, employee-wise, this is a difficult situation. Of course, we are concerned. In terms of new investments, it was the best year ever. We had PLN 461 million, not including the large portfolio of PLN 1.3 billion nominal value from one of the biggest Polish banks that we won, and which will be booked sometime in Q4. This is not all. We are quite ambitious to grow the book in Poland. We are able to, despite very heavy competition, mainly from international players, but we are more competitive than we were historically, and we are able to win at decent IRRs.
This year's supply of portfolios in Poland is exceptionally strong. We are taking advantage of it. Possibly the next year's supply in Poland will not be as strong. It's giving us more motivation to fight for this portfolio in Q4. In Romania, we're very happy with the trend of recoveries. As I told you, the recoveries on the unsecured consumer portfolios is excellent, has been excellent, and most likely will be excellent for the next couple of years. Hence, a significant positive revaluation. On the other hand, the corporate portfolio suffered. We made a thorough review over late summer, early in fall. Result of that is some negative revaluation. Well, this is the business.
We believe we shouldn't expect any bad news in the near future. In the meantime, we were able to invest in a few portfolios, and this 118 is already a few times larger number that you may have seen in our six months results, which is very positive. We're positive on Romania, although the investment potential is much smaller than it is in Poland. Then you have Italy, which has its very good year. KRUK Italy is really happy this year that they see continuous trend of very good recoveries on all asset classes, secured and unsecured. The new investments we made over the past 12 months are performing very well.
That's why we would be very happy to add some new business to Italy. This year we will be working on that. The prospects for Italy and the new investments are quite good. The market is big, and we proved ourselves to the Italian banks that we are back in the game. We are looking in portfolio at competitive prices, expecting quite decent IRRs. We feel we are in the game, and the possibilities to grow the business are opening up quite widely for us. Of course, we are, you know, trying to be not too excited about it and going step by step, but that means that we could expect further growth of our book and profits in Italy.
Please see that for the second time in a row, we have positive revaluation on Italian assets, PLN 16 million. At this time, this pertains to the unsecured book, and this is the result of very good recoveries and continuous trend. Expect more if we will be going that path. Spain on slide number 12, also very good performance on retail unsecured and small positive revaluation, which you don't see because it's covered up by bigger negative revaluation on the corporate assets. Overall, the situation in Spain is good. We're profitable on unsecured. We're most likely growing this profitability into the next quarters. We placed PLN 130 million to work in new portfolios.
We are not likely to add new portfolios this year, but we see that there is significant supply being built for 2022, and we will be ready for it. Again, 2022, you could see growth of investments on the Spanish market. We had some difficult surprise on the corporate portfolio. This write-down that you see in the valuation is concerning the asset class. We are still learning the business. We know now, and we're not giving up. We're not buying such portfolios, but we try to make sure we improve the operations, we improve the team so that we can go back at some point to doing the business on some other portfolios.
So far it's a learning phase. Slide 13, other markets, very good performance on all three of them. Germany, Czech Republic and Slovakia, you can see very nice profitability of 49%. You can see EBITDA doubled the EBITDA of the previous year. We're very happy on that, but this is not so much investments we put into those markets. We are not investing in Germany. We are passive investor there, but we are pursuing new deals in Czech Republic and Slovakia. But the market there is not that big. We, however, will be buying some new portfolios most likely in Q4 in Czech and Slovak Republics this year. A few words about other businesses. Wonga had very good performance.
You can see that we're growing the book and profitability. EBITDA is PLN 225 million, more than doubling the last year results. Also, Novum had very good results. The business tripled its EBITDA year-over-year. ERIF is not growing. That remains for market reasons, but it remains a highly profitable business. If you look at the full picture, this has been a very good quarter for us, more or less close to our expectations. Q4 has good prospects, but we expect that the profitability will be subdued. It will not be a very strong quarter given the three quarters of this year. It's quite obvious for us that this year will be a very good year in total.
We are in process of budgeting, and our ambition is to come up sometime in December with a budget that will be showing growth in 2022 versus a very high profit in 2021. Why is it possible? Because the back book performance is so strong that we are very likely to continue to release positive revaluation throughout 2022, but also beyond. Because we are just adding to the business significant amount of portfolios this year, which will mostly generate profits in 2022 to 2023, 2024. One more comment regarding access to funding. We are also quite comfortable in this area. Despite large investments and significant outflows for bond redemption, the company is very well funded.
We successfully raised this year many hundreds of millions of złoty, close to half a billion złoty in bonds, and even more in our enlarged banking lines, at very good terms, I think. We're ready to invest, to continue to increase our investments. Interest rates have increased in Poland. Of course, that has a direct impact on the growth of our financial costs. We are ready for that. We are budgeting this increase. Actually, I think it's a reasonable decision to raise interest rates in Poland given high inflation of over 6% now. It's not concerning us much at this point.
Bear in mind, of course, inflation is negative for financial costs, but it's positive most likely for our cash flows and for our revenues because people who are repaying debt will have somewhat more money to repay it. Of course, as long as this inflation is not too high and doesn't lead to some impoverishment of the society, but this is not the base case scenario, I think. Last but not least, if you look at slide number 24, we wanted to raise your attention to the fact that KRUK is growing very significantly in profit this year. The share price is lagging behind. It did react very positively today. Overall, we are relatively cheaper on price to earnings than we were historically or were the industry from industry averages, industry averages were.
I hope if we continue to deliver quarterly results, the market will appreciate that. We'll be also doing more and more ESG. On slide 25, you see what we have done in terms of social responsibility, safe and healthy workplace initiatives and also environment. We recently hired a manager responsible for ESG, which will work with the management of putting some more concrete targets and strategy. We're very happy to do it because it's very consistent with how we view the world. Shareholders have responsibility not only for environment but also for the social impact. We want to be transparent. We're finding that some...
We're really welcoming this market change and the fact that the businesses are not only about making profit, but also understanding the impact and making a positive impact on the planet and in the environment. On slide 26, you see the plan for the IR activities. I will advertise WOOD's, a big conference in Prague is coming up. Most likely, I will be present remotely on that conference given the COVID development. I hope to talk to many of you there, if you attend. This concludes my presentation, and operator, we are ready for questions now.
Thank you, Michal. Thank you. We'll now start the Q&A session. If you'd like to ask a question, please press star followed by one on your telephone keypads now. If you do change your mind, please press star followed by two to withdraw your question. Please ensure that when preparing your question, your telephone is unmuted locally. As a reminder, that is star one on your telephone keypads. Our first comes from Marta Jeżewska-Wasilewska.
Hi, Michal. I could have one question because you've had extremely strong recovery in those first three quarters. I'd like to learn a little bit more color what is standing behind those. Could you shed a little bit of light, either with regard to which year vintages are standing behind those? Actually even more interesting for me would be which countries delivered and contributed most to this recovery levels?
Sure. Let me look at slide number eight, where you have a breakdown of recoveries. You see that in the three quarters of 2021, this PLN 1.6 billion recoveries came from Poland, PLN 783 million, and Romania, PLN 422 million, Italy, PLN 226 million, Spain, PLN 108 million, and PLN 18 million. Now, why they were so strong in those countries? Taking one country at a time.
In Poland, we have a continuous trend of overperformance on the legal stream, which comes from the fact that we are sending to legal process and successfully collecting on a larger amount of cases than before, which is a result of high effectiveness of legal system in Poland, but also high effectiveness, better precision of our scoring models, which allowed us to pick additional thousands of cases. Also the fact that we accelerated significantly the legal process, and now something that took us three years takes us only nine months, or six months. In addition, there's a positive feedback loop between the amicable legal system and back amicable legal system.
In practice, it means that if you have not paid to KRUK in amicable process, immediately your case was sent to legal process. If you have not paid in legal process, then maybe you were asked again to pay in amicable. If not, the legal process was repeated and so forth. That resulted in higher effectiveness than we planned some time ago. On top of that, you have significant new investments in Poland. Overall, in the group in 2021, out of those PLN 1.6 billion, about 10% came from new investments, and then they came to a large degree from Poland. You see that out of the PLN 900 million investments, over 460 were Poland.
The performance of these portfolios was also very good, somewhat even above the valuation, initial plan and the valuation level. It's not one change. It's dozens of small changes in the process in Poland, which has not happened overnight, but were being implemented over the past couple of years. Now you see them in full. Now, as we are not afraid of negative COVID effect on recoveries, we are also making them more visible in revising upwards our forecasts. Not only cash, but also positive valuation is significant in Poland. A similar history could be told about Romania, where also most of these additional recoveries are from legal process.
In Italy, you can say that finally we have the results of this changed strategy, changed a few years ago from typical amicable strategy to collection strategy aimed and adjusted to Italian environment, which has short, even shorter than in Poland, amicable process going to court. In the process of court, during the legal process in Italy, we go back, visit those people, offer them settlement plan. Some of them take advantage of that, become our clients, pay settlement, pay those repayments, and some of them will continue and go through the legal process.
The results you see this year are finally the results of this improved legal and amicable process, which we've invested for now those two to three years, and we see the results that are even higher than planned. The upside which we are seeing is also coming from the fact that quarter after quarter we are sending from those portfolios of the back book that we already own, more cases to legal process. We are in the process of also analyzing where is the bottom in those portfolios of cases which really are already not profitable in legal process, and it doesn't make sense. We're testing, and we're sending more hundreds and hundreds of cases with the risk that this break-even point is somewhere there.
So far we have not reached it yet, which tells us, okay, send more, spend this money, but expect results and most likely build some upside to what we have in the books. Lastly, Spain, again, a strong influence of the legal process, which is quite effective in Spain, in which two years ago we identified several thousand cases of transfers to legal process, and they already started to bring in some bringing in cash. Overall, it's mostly about much longer lifetime of these portfolios based mostly on stronger recoveries from legal process, but also stronger amicable process when we are advanced in the legal stage.
Okay. Thank you. If I could have one more, like, if I could just rephrase it. Basically if you invest in growth, you expect recoveries to come at a later stage, but with the same kind of cash multiple or even better ultimately, if I understand it correctly.
Yes. Well, if you compare it to the assumptions we had, you know, five years ago in Italy. Overall, the evolution that we've gone through is that the curves are longer, the recoveries last not 10, not even 15, but 20-25 years. The recoveries on the tail are significant, and the recoveries in total are greater than we anticipated a few years ago. There is a positive relationship, feedback loop between mid and late recoveries also over many-year period. In practice, if you take the example of the Italian portfolios, it means, okay, on these portfolios we bought back, say, in 2016, and we wrote them down. We will recover actually more money from them than we initially thought when we were buying these portfolios.
In that sense, we were not wrong. The curve which we will realize, it's much different. It's much flatter and longer than we initially anticipate.
Okay. Just one more question on the positive evaluations that were also quite visible in the third quarter. At the second quarter, you've been suggesting that positive evaluation in the first half were related also to the fact that you've started extending the recovery curves from 10 to 15 years. Can I learn the reasons for positive evaluations in third quarter as well? Was this also driven by either additional selection of portfolios that you've investigated in Poland that succeeding? I don't know. Can you just give us some color?
Yes. Just to comment on what you said, the extension of the curves in the accounting world was the reason why you saw some positive revaluation, I believe in Q4 of 2020. I think this is the case, not in the second half of 2021. The revaluation in second half or in second quarter of 2021, where they mattered most in Poland and Romania, were conservative and were based on acknowledging that mostly over the next six to nine months, recoveries will be significantly higher. The change we've made in Q2 2021 was that, okay, we had yet another quarter of very strong recoveries, which are 35%-40% above the accounting target. They are really significantly better.
There is no reason to believe they will fall down dramatically over the next quarter or two by 40%. We need to raise them. We didn't raise significantly or at all the long tail of the curve, but we did raise the curves mostly from six to nine months period. As a result, in Q3, we see a much smaller revenue stream from this delta of revenues. There is a specific figure in our accounts which says this is the revenues which come from the fact that recoveries were higher by certain amount than the planned accounting recoveries. This delta has decreased significantly in Q3. Why? Because we raised the curve in Q2 for the next two to three quarters. We did the same exercise in Q3 for the next six to nine months.
What you should expect is that we should be quite precise in terms of recoveries for the next three months. Then probably, if this trend of recoveries will continue, this gap will still be visible. We will most likely revalue the curve, the accounting curve upwards yet again in Q4 and Q1. This is once again the only reasonable thing to do. It's also cautious because we could argue today why not move somewhat up also recoveries, you know, 18 months from now or 24 months from now. We don't do it at this point because we still are in a COVID situation. Of course, the longer the future is, the more uncertain it is.
Q3 revaluation is the same logic we applied in Q2, and it concerns the six to nine months period.
Okay, thank you very much. Weronika, I have no follow-up questions.
As a final reminder, ladies and gentlemen, if you'd like to ask a question, please press star one on your telephone keypad now. We have no further questions, so I'll hand back to the speakers for their final remarks.
Thank you very much for your time and your interest in our company. I wish you good health. Be careful and please contact IR group and team or myself whenever you would like to follow up and have questions. We are in the middle of a busy Q4, so please keep fingers crossed for very good investments this year. I hope to see you via conference or sometimes in person over the next month in the future. Thank you very much.