2015-10-29 11:54:34 CET
2015-10-29 11:55:36 CET
REGULATED INFORMATION
Finnvera Oyj - Interim report (Q1 and Q3)
The Finnvera Group’s Interim Report for January-September 2015
An upswing in financing for ownership arrangements
By the end of September, Finnvera had financed considerably more company
acquisitions than during the same period the year before. During the period
under review, Finnvera was involved in over 700 changes of ownership.
Finnvera's total contribution was EUR 106 million, or 80 per cent more than in
the corresponding period in 2014. It is estimated that Finnvera is involved in
every third company acquisition. The period under review was the first time
after 2010 when the number of ownership arrangements showed an upswing.
According to the SME Barometer survey conducted this autumn, investment
expectations have improved since last spring. As yet, however, no change is
apparent in Finnvera's financing; as before, SME financing was needed for
working capital considerably more than for investments. It is over three years
since investments accounted for a larger share of financing offered to SMEs
than working capital.
Business operations and the financial trend
During the period under review, the volume of export credit guarantee offers
given by Finnvera was 52 per cent greater than in the corresponding period in
2014. As concerns financing offers for export credits, the figure was over two
times greater. The volume of loans and guarantees granted to SMEs and
enterprises larger than the SME definition applied by the EU was 31 per cent
greater than the year before.
Finnvera Group
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1 Jan-30 Sep 1 Jan-30 Sep
2015 2014
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Offered financing
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Loans and guarantees 694 MEUR 530 MEUR
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Export credit guarantees and special 5 733 MEUR 3 767 MEUR
guarantees
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Export credits 3 601 MEUR 1 516 MEUR
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30 Sep 2015 31 Dec 2014
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Outstanding commitments
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Loans and guarantees 2 338 MEUR 2 378 MEUR
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Export credit guarantees and special 16 628 MEUR 12 600 MEUR
guarantees
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Export credits 4 263 MEUR 3 319 MEUR
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-------------------------------------------------------------------------------- 1 Jan-30 Sep 1 Jan-30 Sep
2015 2014
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Operating profit 108 MEUR 75 MEUR
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Profit for the period 106 MEUR 76 MEUR
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30 Sep 2015 31 Dec 2014
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Equity ratio 13,2 % 14,4 %
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Capital adequacy, Tier 2 17,9 % 18,6 %
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Cost-income ratio 25,5 % 25,7 %
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The Finnvera Group's profit for the third quarter of 2015 was EUR 51 million,
or EUR 23 million better than for the second quarter (28 million). The main
factors improving the result were the reduction of EUR 19 million in impairment
losses on receivables and guarantee losses, the reduction of EUR 5 million in
losses from items carried at fair value, and the decrease of EUR 1 million in
administrative expenses.
The Finnvera Group's profit for January-September totalled EUR 106 million (76
million), or EUR 30 million more than during the corresponding period in 2014.
The main factors improving the financial performance for the past nine months
were the decrease of EUR 27 million in impairment losses on receivables and
guarantee losses, the increase of 5 per cent, or EUR 5 million, in the parent
company Finnvera plc's fee and commission income, as well as the decrease of
EUR 6 million in losses from items carried at fair value.
The parent company Finnvera plc's profit for January-September stood at EUR 108
million (84 million). The Group companies and associated companies had an
effect of EUR -2 million on the profit (-9 million). Venture capital
investments accounted for EUR -8 million (-9 million) of this effect. Interest
equalisation and the financing of export credits by Finnish Export Credit Ltd
accounted for EUR 6 million (0.5 million).
When the result is broken down by business sector, both the parent company's
export financing and SME financing showed a profit for January-September: the
separate result for export credit guarantees and special guarantees came to EUR
68 million (79 million), while the profit for credits and guarantees in SME
financing was EUR 40 million (4 million).
Finnvera Group Q3/201 Q2/201 Change Q3/201 Change 1-9/20 1-9/20 Change
5 5 4 15 14
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Financial MEUR MEUR % MEUR % MEUR Meur %
performance
--------------------------------------------------------------------------------
Net interest 15 15 0 14 3 43 42 2
income
--------------------------------------------------------------------------------
Fee and 34 36 -5 33 5 107 103 5
commission
income and
expenses (net)
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Gains/losses -2 -7 -77 -6 -74 -8 -14 -44
from items
carried at fair
value
--------------------------------------------------------------------------------
Administrative -9 -11 -14 -8 12 -32 -29 8
expenses
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Impairment 16 -3 -719 10 63 2 -25 -58
losses,
guarantee
losses
--------------------------------------------------------------------------------
Loans and 6 -7 -186 -38 -116 -66 -79 76
domestic
guarantees
--------------------------------------------------------------------------------
Credit loss 9 5 101 23 -59 69 45 162
compensation
from the State
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Export credit 1 0 -410 25 -96 -1 9 -86
guarantees and
special
guarantees
--------------------------------------------------------------------------------
Operating profit 53 28 86 41 27 108 75 45
--------------------------------------------------------------------------------
Profit for the 51 28 81 42 22 106 76 40
period
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Outlook for financing
In euros, the demand for SME financing was about one third greater than during
the first nine months the year before. The growth was attributable above all to
Finnvera's wider mandates, such as the possibility to finance enterprises
larger than SMEs and to subscribe bonds. The volume of SME financing is
expected to remain at a high level during the last quarter of the year as well.
Demand for export credit guarantees also continued strong during the third
quarter and is expected to remain equally brisk until the end of the year.
Country risks are always assessed when guarantee decisions are made; at
present, a close eye is kept on economic trends in countries such as Russia and
Brazil. These two countries together account for just under one quarter of all
outstanding export credit guarantees.
According to the current estimate, the Finnvera Group's financial performance
for 2015 is likely to be better than in 2014 because there have been fewer new
impairment losses and provisions for losses than had been expected. In a
similar estimate made early in 2015, the financial performance was expected to
fall below that in 2014. The uncertainty factors associated with economic
trends make it difficult to predict financial performance. If more risks
materialise than has been anticipated, the situation may weaken considerably
from what is projected.
CEO Pauli Heikkilä:
“The number of enterprises will inevitably decline if there is no one to
continue ageing entrepreneurs' work. Both competitive companies on the domestic
market and companies engaged in exports should be able to continue their
operations by means of ownership changes. Acquiring an operating company is a
viable alternative to establishing a new one. For our part, we are actively
involved in the financing of various ownership arrangements. Together with the
Ministry of Employment and the Economy, we are planning a new programme for
financing ownership changes. We are also preparing the adoption of an
instrument for mezzanine financing. The aim is to put the new financing tools
to use in early 2016.
During the period under review, we completed our biggest acquisition of funds
to date: one billion euros. We manage a large liquidity reserve in order to be
able to finance, among other things, the coming purchases of ships. Our
authorisation to grant export credits is already largely in use and we are
currently negotiating about raising it.”
Additional information:
Pauli Heikkilä, CEO, tel. +358 29 460 2400
Ulla Hagman, Senior Vice President, Finance and IT, tel. +358 29 460 2458
DISTRIBUTION
NASDAQ OMX Helsinki Ltd
London Stock Exchange
Major media
www.finnvera.fi
This Interim Report is available at www.finnvera.fi> Finnvera > Publications >
Annual Reviews and Interim Reports. As from the beginning of 2016, Finnvera
will publish its interim reports semi-annually.
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