DJ Finnvera Group's Report of the Board of Directors and Financial Statements 2024 - Level of financing reduced from previous year, expectations of future demand positive - Result EUR 228 million
Finnvera Oyj (69BL)
Finnvera Group's Report of the Board of Directors and Financial Statements 2024 - Level of financing reduced from
previous year, expectations of future demand positive - Result EUR 228 million
21-Feb-2025 / 10:00 CET/CEST
The issuer is solely responsible for the content of this announcement.
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21.2.2025 11:00:01 EET | Finnvera Oyj | Annual Financial Report
Finnvera Group, Stock Exchange Release, 21 February 2025
Finnvera Group's Report of the Board of Directors and Financial Statements 2024
Level of financing reduced from previous year, expectations of future demand positive - Result EUR 228 million
Finnvera Group, summary 2024 (vs. 2023)
. Result 228 MEUR (433) - The result for the period under review was strong for all business operations.
Net interest income grew by 20% and net fee and commission income by 12%. During the period under review, Finnvera
was able to partially reverse loss provisions for export credit guarantees and special guarantees, which have had a
significant impact on the company's result in recent years, especially those relating to cruise shipping companies.
The reference period saw larger reversals of loss provisions than the period under review.
. Result by business operations: Result of parent company Finnvera plc's SME and midcap business stood at
23 MEUR (55) and that of Large Corporates business at 173 MEUR (351). The impact of Finnvera's subsidiary, Finnish
Export Credit Ltd, on the Group's result was 32 MEUR (27).
. The cumulative self-sustainability target set for Finnvera's operations was achieved.
. The balance sheet total EUR 14.8 bn (14.3) increased by 3%.
. Contingent liabilities decreased by 9% and stood at EUR 14.9 bn (16.4).
. Non-restricted equity and the assets of the State Guarantee Fund, which provide the Group's reserves for
covering potential future losses, increased by 12% and totalled EUR 2.1 bn (1.9).
. Expected credit losses on the balance sheet were reduced by 4% to EUR 1.1 bn (1.2).
. The NPS index (Net Promoter Score) used to measure client satisfaction improved by 15 points to 79 (64).
. Outlook for 2025: The business outlook for cruise shipping companies continued to improve in 2024. The
credit loss risk of export financing liabilities remains high, however, which causes uncertainty concerning the
Finnvera Group's financial performance in 2025.
Finnvera Group, year 2024 (vs. 2023)
Result Balance sheet total
228 MEUR EUR 14.8 bn
(433), change -47% (14.3), change 3%
Contingent liabilities Non-restricted equity and
EUR 14.9 bn the assets of The State Guarantee Fund
(16.4), change -9% EUR 2.1 bn (1.9), change 12%
NPS index
Expense-income ratio
(net promoter score)
17.3%
79
(19.4), change -2,1 pp
(64), change 15 points Comments from CEO Juuso Heinilä:
"Year 2024 was challenging for the Finnish economy, even if a cautious improvement could be observed in the early part of the year. Finland's key export markets were also affected by a downturn, which dampened Finnish export companies' prospects. While interest rates dropped and inflation decreased, geopolitical uncertainty persisted.
Finnvera granted EUR 0.9 billion (1.8) in domestic loans and guarantees in 2024. The significant decrease in financing from the previous year is due to a major individual amount of working capital financing granted to a large corporate in the reference period. The level of SME and midcap financing was similar to the reference period. The largest share of funding by sector was granted to industry, and the regional drivers were the Helsinki Metropolitan Area and Lapland. Financing for investments did not reach the previous year's level. The level of financing for corporate acquisitions and transfers of ownership was also lower than in previous years.
A total of EUR 73 million (36) was granted in climate and digitalisation loans intended for green transition and digitalisation projects under the InvestEU guarantee programme. These loans were first granted in June 2023. To ensure that companies of all sizes have access to financing, we launched loans for micro-enterprises' growth as a pilot project at the beginning of October 2024. Over three months, EUR 6 million in these loans was granted to micro-enterprises. The pilot project will continue until the end of March 2025, after which we will reassess the availability of financing for small companies.
In accordance with Finnvera's strategy, 92% of domestic financing was allocated to start-ups, SMEs seeking growth and internationalisation, investments, transfers of ownership, export and delivery projects, and SME guarantee projects. The long period of economic uncertainty eroded SMEs' liquidity and increased the number of applications for corporate restructuring and bankruptcy.
Finnvera granted export credit guarantees, export guarantees and special guarantees amounting to EUR 2.9 billion (5.4). The lower amount of export financing reflected the post-cyclical nature of Finnish exports and reduced demand for exports. Annual fluctuations are also always influenced by the timing of large individual export transactions. In particular, financing was granted to companies in the telecommunications, cruise shipping and mining sectors.
Largest export credit guarantee agreement related to telecommunications sector in Finnvera's history was signed in April concerning Nokia's deliveries for the Indian 5G network worth USD 1.5 billion. In the mining sector, we financed Sibanye-Stillwater's Keliber lithium project with a Finance Guarantee, which can be granted for domestic investments that support exports. In the energy sector, we financed Wärtsilä's deliveries of energy storage systems for solar and wind power projects in the United States and Chile. These mining and energy projects, whose total value was approx. EUR 500 million, were the first export financing projects compliant with Finnvera's climate criteria. Towards the end of the year, Finnvera participated in Meyer Turku's construction financing that amounted to around EUR 1 billion for the Icon 3 ship.
Finnish Export Credit Ltd, which is Finnvera's subsidiary, granted EUR 0.6 billion in export credits (0.5) in 2024. While the demand for export credits increased slightly, it remains significantly lower than in pre-pandemic years. An increasing number of export transactions are financed by a bank to which Finnvera grants a guarantee.
2024 was a successful year for Finnvera. The Finnvera Group's result was EUR 228 million (433). The SME and midcap business, export credit guarantee and special guarantee operations, and subsidiary Finnish Export Credit Ltd turned a profit. Finnvera also built up its reserves for possible future losses. The business outlook for the cruise shipping sector, which is important for Finnvera's export credit guarantee exposure, has continued to improve. Repayments have also helped to reduce exposure relating to Russia. In recent years, Finnvera has been able to partially reverse loss provisions for export financing, which have had a significant impact on the Group's financial performance since 2020. The reversal of loss provisions has especially impacted the good results for the last two financial periods.
As a result of crises affecting the global economy, the difficulties faced by some companies around the world and in various sectors have built up to form an insurmountable obstacle. During the period under review, Finnvera incurred major export credit guarantee losses in two cases. Our mission is to bear the risks of export companies. Our core business enjoys a high level of profitability, building up our reserves and creating preconditions for enabling companies' growth and exports. However, the credit loss risks of exposure relating to export financing remain high, which may affect Finnvera's future financial performance and reserves.
We continued to develop our operations and services in line with our strategy in 2024. The ongoing upgrade of our basic information systems supports the digitalisation of services and a good client experience. Our client satisfaction reached an exceptionally high level, as did our personnel satisfaction. We invested in accelerating the growth of midcap enterprises in close cooperation with the European Investment Bank and the Tesi Group, and worked together with the Team Finland network and Business Finland to promote exports. We maintained export financing expertise, especially in SMEs and midcap enterprises, and we brought out new export financing instruments to ensure the availability of financing. The overhaul of the legislation applicable to Finnvera, which is included in the Government Programme and which is extremely important in terms of developing Finnvera's operations and the competitiveness of export financing, was circulated for comments.
We advanced our sustainability measures based on our goals in 2024. We joined the Net-Zero ECA Alliance of export credit agencies, which enables us to focus on the sustainability theme and enhance our impact through international cooperation. We developed Finnvera's sustainability reporting as planned.
In 2025-2028, our new strategy adopted by the company's Board of Directors at the end of the year will emphasise increasing the volume of Finnish exports and the number of exporters as well as enabling growth and new business. The achievement of these goals will be supported by our competent personnel and management as well as client-oriented digitalisation. Finnvera contributes to ensuring that Finnish companies are able to invest, develop their products and get their products out around the world. This is a prerequisite for ensuring that we can continue to look after our welfare in Finland in the future."
Finnvera Group 2024 2023 Change, % Financing granted, EUR bn Domestic loans and guarantees 0.9 1.8 -51% Export credit guarantees, export guarantees and special guarantees 2.9 5.4 -47% Export credits 0.6 0.5 15% The fluctuation in the amount of granted financing is influenced by the timing of individual major financing cases. The credit risk for the subsidiary Finnish Export Credit Ltd's export credits is covered by the parent company Finnvera plc's export credit guarantee. Exposure, EUR bn 31 Dec 2024 31 Dec 2023 Change, % Domestic loans and guarantees 2.9 3.0 -4% Export credit guarantees, export guarantees and special guarantees 21.1 23.4 -10% - Drawn exposure 14.3 14.2 1% - Undrawn exposure 4.4 4.5 -2% - Binding offers 2.4 4.7 -49% Parent company's total exposure 24.0 26.4 -9% Contract portfolio of export credits 10.2 11.0 -8% - Drawn exposure 6.5 7.3 -11% - Undrawn exposure 3.7 3.7 -2% The exposure includes binding credit commitments as well as recovery and guarantee receivables. Financial performance
The Finnvera Group's result for 2024 was EUR 228 million (433). Finnvera's result was strong for all business operations. EUR 46 million of the total result was generated in the last quarter of the year, and EUR 182 million between January and September. Compared to the year before, the result was most significantly affected by the changes in the amount of expected losses, or loss provisions. Loss provisions have had a significant impact on the Group's result in recent years. Finnvera was able to partially reverse its loss provisions for export credit guarantees and special guarantees in 2024, especially those relating to cruise shipping companies. In the reference period, Finnvera was able to reverse more loss provisions than in the review period, which led to an exceptionally good result in 2023. The result for the review period was also significantly affected by higher net interest income and fee and commission income as well as changes in the value of items recognised at fair value through profit or loss.
The Group's realised credit losses and change in expected losses totalled EUR 49 million during the review period, whereas the corresponding item was positive with a value of EUR 210 million during the reference period. The realised credit losses of EUR 121 million (128) were slightly lower than in the reference period. During the period under review, two larger individual export credit guarantee compensations were paid. Expected losses, or loss provisions, decreased by EUR 51 million (320), of which the reversal of loss provisions for export credit guarantee and special guarantee operations accounted for EUR 74 million (376). Credit loss compensation from the State covering losses in domestic financing totalled EUR 20 million (18).
Compared to the year before, the Group's net interest income increased by 20% to EUR 139 million (115) and net fee and commission income by 12% to EUR 198 million (177). The higher level of market interest rates was a particularly important factor affecting the increased net interest income. The most significant factors increasing the net fee and commission income were recognition of guarantee premiums for reimbursed export and special guarantees and prepayments of individual liabilities as well as the reimbursement of insurance premiums received as a result of the cancellation of reinsurance contracts. The changes in the Group's value of items recognised at fair value through profit or loss and net income from foreign currency operations amounted to EUR 8 million (-9).
After the result of the period under review, the parent company's reserves for domestic operations as well as export credit guarantee and special guarantee operations for covering potential future losses amounted to a total of EUR 1,878 million (1,676) at the end of December. These reserves, which also cover the credit risk of export credits granted by the subsidiary, consisted of the following: the reserve for domestic operations, EUR 432 million (405) as well as the reserve for export credit guarantees and special guarantees and the assets of the State Guarantee Fund for covering losses, totalling EUR 1,446 million (1,272). The State Guarantee Fund is an off-budget fund whose assets include the assets accumulated from the activities of Finnvera's predecessor organisations. Under the Act on the State Guarantee Fund, the Fund covers the result showing a loss in the export credit guarantee and special guarantee operations if the reserve funds in the company's balance sheet are not sufficient. The non-restricted equity of the subsidiary, Finnish Export Credit Ltd, amounted to EUR 230 million (198) at the end of December.
Finnvera Group Q4/ Q4/
2024 2023 Change 2024 2023 Change
Financial performance MEUR MEUR % MEUR %
MEUR
Net interest income 139 115 20% 37 33 10%
Net fee and commission income 198 177 12% 50 40 24%
Gains and losses from financial instruments carried at fair value through P&L and 8 -9 - -2 -5 -54%
foreign exchange gains and losses
Net income from investments and other operating income 0 1 -95% 0 0 -23%
Operational expenses -53 -50 6% -16 -14 12%
Other operating expenses, depreciation and amortisation -7 -5 35% -3 -1 118%
Realised credit losses and change in expected credit losses, net -49 210 - -19 209 -
Operating result 236 439 -46% 47 262 -82%
Income tax -8 -6 45% -1 -1 4%
Result 228 433 -47% 46 261 -82% Outlook for financing
The worst of the recession is behind us, and the Finnish economy is forecast to start growing in 2025. Great expectations are currently placed on the improved outlook for exports as well as the growth and renewal of the entire business sector.
We expect that the demand for Finnvera's domestic financing will increase, including more and more financing for investments, as the economic upturn drives a need for more production capacity. Due to the long-standing uncertainty, the economic position of many companies is weak. Finnvera's role is stressed in arranging financing and sharing the risk with other providers of financing.
We encourage companies to grasp the growth opportunities created by the green transition with the help of our climate and digitalisation loans and other incentives for sustainable financing. We will continue piloting loans for micro-enterprises' growth projects until the end of March 2025. While we expect the high demand for the loans to continue, we will reassess small companies' access to financing after the conclusion of the pilot. Finnvera strives to be active wherever our input is needed to arrange access to financing.
We expect that the demand for export credit guarantees will start growing in 2025 and that this growth will continue in 2026. Exportation of investment goods, which is vital for Finland's exports, is post-cyclical and the increase in demand will be reflected in export credit guarantees granted by Finnvera with a delay. Positive signs can already be seen in several sectors, however. Finnvera plays an important role in granting guarantees for long-term trade. We encourage export companies to seek growth in emerging and new markets and to rely on Finnvera for financing export transactions and risk hedging. We will continue to grant export credit guarantees to Ukraine as part of Finland's national reconstruction programme for the country.
Finnvera, the Tesi Group and Business Finland will step up their cooperation with the goal of boosting companies' growth, exports, and the impact of financing. We will continue to work actively together with Team Finland and promote the growth and internationalisation of companies, also while the renewal of public export functions is underway. Finnvera's Trade Facilitators strive to bring together foreign buyers and Finnish exporters and to promote trade using Finnvera's export financing together with Business Finland. The aims also include increasing the number of midcap enterprises in Finland. Outlook for 2025
The business outlook for cruise shipping companies continued to improve in 2024. The credit loss risk of export financing liabilities remains high, however, which causes uncertainty concerning the Finnvera Group's financial performance in 2025. Further information:
Juuso Heinilä, CEO, tel. +358 29 460 2576
Ulla Hagman, CFO, tel. +358 29 460 2458
Finnvera publishes the Report of the Board of Directors and its financial statements as an XHTML file compliant with the European Single Electronic Format (ESEF) requirements. Auditor Ernst & Young Ltd has issued an independent assurance report that provides reasonable assurance concerning Finnvera's ESEF financial statements. The XHTML file is available in Finnish and English. Finnvera additionally publishes the report and financial statements in PDF format.
ESEF Report 2024 (ZIP)
Finnvera Group's Report of the Board of Directors and Financial Statements 1 January - 31 December 2024 (PDF)
Distribution: NASDAQ Helsinki Ltd, London Stock Exchange, key media, www.finnvera.fi
The report is available in Finnish and English at www.finnvera.fi/financial_reports About Finnvera Oyj
Finnvera provides financing for the start, growth and internationalisation of enterprises and guarantees against risks arising from exports. Finnvera strengthens the operating potential and competitiveness of Finnish enterprises by offering loans, guarantees and other services associated with the financing of exports. The risks included in financing are shared between Finnvera and other providers of financing. Finnvera is a specialised financing company owned by the State of Finland and it is the official Export Credit Agency (ECA) of Finland. www.finnvera.fi/eng Attachments . 743700T69OBBJO7TCA15-2024-12-31-0-en.zip . Finnvera Group Report of the Board of Directors and Financial Statements 2024.pdf News Source: Finnvera Oyj
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ISIN: XS1613374559 Category Code: ACS TIDM: 69BL Sequence No.: 376891 EQS News ID: 2089743 End of Announcement EQS News Service =------------------------------------------------------------------------------------
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