ATLANTA– Processing giant First Data Corp. reported this morning that debt incurred from its huge 2007 takeover continues to saddle it with big losses but rapid growth in debit processing helped stem the losses.
The company, taken private three years ago in a $27 billion deal by Kohlberg Kravis Roberts & Co., reported a first quarter loss of $217.1 million, as interest expense on the takeover debt remained high, at $442.3 for the quarter. The first quarter losses followed a $1.02 billion loss for 2010.
But First Data, which is one of the biggest recipient of debit fees through its STAR debit network, card issuing and debit processing to prepaid solutions to merchant acquiring/processing, said revenues from its debit-related activities increased by $105.2 million, or 14%, for the first quarter, to $864.3 million, even as total revenue growth slowed to just 6%. Debit issuer transactions were up 12% for the first quarter.
“Higher volumes and good sales performance in our domestic and international merchant acquiring businesses coupled with lower expenses led to increased profitability across the board during the first quarter for First Data,” said Jonathan Judge, the company’s CEO. “We continued to strengthen the capital structure by refinancing debt well ahead of maturities. This provides increased financial flexibility and the opportunity to invest for future top-line growth.”
