2017-02-28 14:07:06 CET
2017-02-28 14:07:06 CET
REGULATED INFORMATION
Finnvera Oyj - Financial Statement Release
Financial Statements of the Finnvera Group 1 January–31 December 2016
A year of reviving demand and new authorisations
The world economy showed some positive signs in 2016, although political events
created a degree of uncertainty. Finnish companies also reported greater demand
and increasing investments, and individual large export deals gave much-needed
impetus to Finland’s otherwise sluggish exports. Owing to the anticipated
increase in demand for export financing services, and to respond to higher
exposures, Finnvera’s authorisation to provide export financing was raised
markedly. In addition, Finnvera received new mandates, such as the Growth Loan
for financing projects undertaken by rapidly growing SMEs and midcap companies.
New financing solutions relating to the promotion of small export transactions
were also introduced on the market during the year.
Business operations and the financial trend
The volume of loans and guarantees offered by Finnvera to SMEs and midcap
companies in 2016 was 7 per cent less than in the year before. However,
financing for growing and internationalising companies and for transfers of
ownership picked up in line with the strategy. Financing offered for growing
and internationalising companies rose by 6 per cent from the previous year,
while financing for transfers of ownership rose by 21 per cent.
Demand for export credit guarantees and special guarantees increased by 50 per
cent in 2016, to EUR 14.6 billion. Demand for export credits rose to EUR
12.5 billion, which was 74 per cent more than a year ago. Although interest in
export credit guarantees, special guarantees and export credits perked up, the
offers given by Finnvera for export credit and special guarantees and for
export credits fell by 34 per cent and 82 per cent, respectively. The reason
was that some projects or their credit agreements were still being negotiated
at the closing of the financial period.
Finnvera Group
1 Jan–31 Dec 1 Jan–31 Dec Change %
2016 2015
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Offered financing, MEUR
--------------------------------------------------------------------------------
Loans and guarantees 845 906 -7 %
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Export credit guarantees and special 4 438 6 760 -34 %
guarantees
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Export credits 760 4 131 -82 %
--------------------------------------------------------------------------------
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31 Dec 2016 31 Dec 2015 Change %
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Outstanding commitments, MEUR
--------------------------------------------------------------------------------
Loans and guarantees 2 261 2 285 -1 %
--------------------------------------------------------------------------------
Export credit guarantees and special 18 426 17 436 6 %
guarantees
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Export credits 4 782 4 240 13 %
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
1 Jan–31 Dec 1 Jan–31 Dec Change %
2016 2015
--------------------------------------------------------------------------------
Net interest income and net fee and 194 197 -2 %
commission income, MEUR
--------------------------------------------------------------------------------
Operating profit, MEUR 69 114 -39 %
--------------------------------------------------------------------------------
Profit for the period, MEUR 70 111 -37 %
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
31 Dec 2016 31 Dec 2015 Change %
--------------------------------------------------------------------------------
Balance sheet total, MEUR 9 498 8 418 13 %
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Equity, MEUR 1 207 1 121 8 %
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-of which non-restricted reserves, MEUR 955 871 10 %
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
31 Dec 2016 31 Dec 2015 Change
%-point
--------------------------------------------------------------------------------
Equity ratio, % 12,7 13,3 -0,6
--------------------------------------------------------------------------------
Capital adequacy, Tier 2 , % 24,3 19,6 4,7
--------------------------------------------------------------------------------
Cost-income ratio, % 27,0 28,3 -1,3
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The Finnvera Group’s profit for July–December 2016 was EUR 77 million.
Financial performance improved by EUR 84 million when compared against the loss
of EUR 7 million entered for January–June 2016.
The main reasons for the improvement in financial performance from the first to
the second half of the year were the smaller losses from export credit
guarantee operations and the smaller provisions for losses recorded by the
parent company, Finnvera plc. In July–December, export credit guarantee losses
and provisions for losses totalled only EUR 2 million, whereas the losses
entered and the provisions made in January–June came to EUR 66 million. During
the first half of 2016, a provision of EUR 55 million for guarantee losses was
made for Oi S.A. of Brazil when it transpired that the receivables from the
company involve an obvious risk.
The profit of the Finnvera Group for 2016 was EUR 70 million (111 million).
This was EUR 41 million, or 37 per cent, less than in the previous year. As was
pointed out above, the reasons for the weaker performance were the parent
company’s export credit guarantee losses as well as provisions for losses that
were realised during the first half of the year and were markedly greater than
those entered the year before.
The profit of the parent company, Finnvera plc, for 2016 stood at EUR 65
million (95 million), of which large corporates business accounted for EUR 33
million (82 million) and SME and midcap business for EUR 32 million (38
million). The performance of the large corporates business declined clearly
from the previous year, while the performance of SME and midcap business was at
a good level for a second year in a row.
Finnvera Group H2/201 H1/201 Change H2/201 2016 2015 Change Change
6 6 5
MEUR MEUR % MEUR MEUR MEUR MEUR %
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Net interest income 24 27 -11 28 50 56 -6 -10
--------------------------------------------------------------------------------
Fee and commission 77 67 16 68 144 141 3 2
income and expenses
(net)
--------------------------------------------------------------------------------
Gains/losses from -10 -10 0,3 -15 -20 -21 -1 -6
items carried at
fair value
--------------------------------------------------------------------------------
Net income from 0,2 0,1 16 0,4 0,3 0,1 0,2 133
investments
--------------------------------------------------------------------------------
Other operating 12 0,2 - 2 12 2 10 -
income
--------------------------------------------------------------------------------
Administrative -22 -22 -4 -22 -44 -44 0,1 0
expenses
--------------------------------------------------------------------------------
Depreciation and -2 -1 157 -1 -2 -1 1 124
amortization
--------------------------------------------------------------------------------
Other operating -2 -3 -31 -3 -4 -6 -1 -22
expenses
--------------------------------------------------------------------------------
Net impairment loss -0,2 -65 -100 -0,2 -66 -15 51 348
on financial assets
--------------------------------------------------------------------------------
Impairment loss on -2 0 - 0 -2 0 2 -
other financial
assets
--------------------------------------------------------------------------------
Operating profit 77 -7 - 58 69 114 -44 -39
--------------------------------------------------------------------------------
Profit for the 77 -7 - 57 70 111 -41 -37
period
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Outlook for financing
The economic expectations of SMEs have taken a slightly upward turn, which is
believed to reflect positively on financing granted by Finnvera to SMEs in
2017. This will probably be seen particularly clearly in financing for growth
companies, but the rising trend in financing intended for investments by
growing and internationalising enterprises may also continue following the turn
that occurred in 2016. It is assumed that financing granted by Finnvera for
transfers of ownership will continue at the same solid level as in 2016. It is
generally believed that the bond activities of SMEs and midcap companies will
gain slightly more momentum and will also be reflected in Finnvera’s financing.
Financing solutions offered to buyers play a pivotal role in exports of capital
goods sold by large corporations. Demand for export credit guarantees and
export credits is expected to rise from the previous year, but the total
amounts depend on the timing of individual large export transactions. Ships,
telecommunications and the forest industry are still anticipated to account for
the bulk of demand associated with large corporations’ exports. Among the new,
opening markets, the greatest demand is likely to focus on Iran and Argentina.
Exposures for Russian trade declined in 2016 as buyers postponed investments,
but new demand is expected in 2017. Other countries where the demand for
Finnvera’s guarantees is expected to rise are India and Mexico. In these
countries, reforms associated with the modernisation of infrastructure will
provide export opportunities for Finnish companies. In Finland, the progress of
large investment projects promoting exports have an impact on the demand for
guarantees.
The year 2017 is expected to be a year of growing demand. It is thought that
implementation of the strategy throughout the Group will proceed as planned
and that operations will be self-sustainable in the current financial period as
well. 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:
“Finnvera’s year 2016 was driven, above all, by the greater demand for export
financing and the substantial increase in transfers of ownership. Development
of Team Finland activities continued and as a result of this work, 370
internationalising enterprises received tailored service proposals. The Finnish
Parliament’s decisions to raise Finnvera’s authorisations guarantee that we’ll
be able to contribute to the success of Finnish enterprises on the
international market in the coming years as well.
With regard to the formation of financial performance, the past year stands out
among the preceding years. In terms of domestic financing, the structure of
the credit portfolio – and hence the financial result – were at a good level.
In contrast, with respect to export credit guarantees, the year 2016 saw the
realisation of one major risk. A large Brazilian telecommunications company
filed for debt restructuring and, for this reason, Finnvera’s performance at
the company level was lower than in past years. Finnvera’s statutory mission is
to bear some of the credit risks that are inevitable in all export
transactions.
It is likely that 2017 will be characterised by increasing demand for
Finnvera’s export financing services. In SME financing, transfers of ownership
will remain at a high level. Finnvera will serve as an intermediary
organisation for the European EFSI financing. The international operating
environment will remain uncertain. In order to spur domestic growth, we need
long-term improvements in the structure of the Finnish export sector and in
cost competitiveness.”
Additional information:
Pauli Heikkilä, Chief Executive Officer, tel. +358 29 460 2400
Ulla Hagman, Senior Vice President, CFO, tel. +358 29 460 2458
Distribution:
NASDAQ Helsinki Ltd
London Stock Exchange
The principal media
www.finnvera.fi
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Finnvera > Publications > Annual Reports and Interim Reports.
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