Inter have released a detailed report regarding the club’s financial situation as part of a declaration published on the official club homepage.
The Nerazzurri have said the club may need to sell players in order to fund new signings due to the club’s negative cash flow in the wake of the COVID-19 pandemic.
“In addition, one of Inter’s main liquidity needs comes from the payment of transfer fees for acquiring player registrations. The transfer windows for the acquisition and elimination of players take place in January and summer. During these times, Inter may need additional cash to meet their new player acquisition needs and they may generate additional cash through the sale of existing players.
“However, the value of the asset represented by its current roster may be adversely affected by the prolonged impact of COVID-19 which, in turn, may increase Inter’s cash requirements to fund the payment of costs of transfer. Additionally, Inter’s cash flow could be negatively affected by the potential return of players on temporary loan in the event that those loans are not also extended before the end of the extended 2019/2020 season.
“This, combined with the lack of match-day income positively affecting its overall working capital, could force Inter to sell existing players which, in turn, could negatively impact their results. operations, financial condition and cash flow. “
Inter have said match-day income has increased by nearly € 10million, despite Inter having lost home games due to the global coronavirus crisis.
“Although Inter did not record any game income for the games not played, Inter’s game income rose from € 9.0million to € 48.8million for the nine month ended March 31, 2020 versus € 39.7 million for the nine months ended March 31, 2019, mainly due to an increase in both stadium attendance and average selling price and was achieved despite the negative impact of the postponement of 4 home games originally scheduled for the three months ended March 31, 2020 (three in Serie A and one in the UEFA Europa League). The impact of such postponement contributed to an estimated reduction in income Inter match tickets.
The club then provided an update regarding the club’s running costs, which have increased from last year.
“Inter’s total operating costs for the nine months ended March 31, 2020 increased from € 73.0 million to € 335.7 million from € 262.6 million for the nine months ended March 31, 2019, mainly due to an increase of 26.6 million euros in staff costs for gaming staff resulting from an increase in player salaries, due to the purchase of top players .
“Inter uses its cash to pay operating expenses, personnel costs, interest payments and other debts as they fall due and Inter’s sources of cash have always been shareholder loans. and other distributions from its subsidiary Inter Media, including through loans and upstream dividends. “
Next, the Nerazzurri revealed that the club’s net financial position has declined, with the main reason being that shareholder loans are being converted into equity.
“As of March 31, 2020, the consolidated net financial position of Inter groupe decreased by € 69.8 million or 15.1% to € 391.6 million compared to € 461.4 million as of March 31, 2019 .
“The decrease is mainly due to the conversion into equity of shareholder loans for an amount equal to 100 million euros and to a decrease of 4.7 million euros in the outstanding principal of senior covered bonds issued. December 21, 2017 (via a mandatory amortization Payment). As of March 31, 2020, € 138.9 million was outstanding under shareholder loans.
Inter went on to add that club owners Suning had waived repayment of the loan so that the amount owed could be allocated to the club’s cash reserves.
“Notwithstanding Suning’s renewed commitment to support the Group by waiving the repayment of part of the shareholder loan then in progress for an amount of 10 million euros so that the corresponding amount can be allocated to the capital reserve on or around June 22, 2020. “
In closing, the club revealed that the unbound financial situation and the uncertainty over how long that will be the case may well have an impact on how things play out at different levels.
“Inter’s equity position at an unconsolidated level could become negative from the new financial year starting July 1, 2020 due to losses accumulated during the financial year ended June 30, 2020.
“Such a negative capital position may persist due to the enforceability of a recently enacted emergency decree that allows companies to temporarily waive their minimum capital requirements until December 31, 2020.
“We are unable to predict how long Inter’s financial position at an unbound level will remain negative and any future disruption resulting from the COVID-19 pandemic could negatively impact its ability to return to a position. positive equity capital, which in turn could have a material adverse effect on our business, results of operations, financial condition and cash flows.