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Financing needed for exports and working capital

25.05.2012

The Finnvera Group’s Interim Report for 1 January–31 March 2012

Key figures for the first quarter of 2012

  • Loans and domestic guarantees granted: EUR 197 million (Q1/2011: EUR 221 million)
  • Export credit guarantees, export guarantees and special guarantees granted: EUR 601 million (Q1/2011: EUR 598 million)
  • Outstanding commitments for SME financing: EUR 3,169 million (12/2011: EUR 3,149 million)
  • Outstanding commitments for export financing: EUR 9,915 million (12/2011: EUR 10,256 million)
  • The Finnvera Group’s financial performance: EUR 23 million (Q1/2011: EUR 10 million)
  • Finnvera plc’s financial performance: EUR 23 million (Q1/2011: EUR 11 million)
  • Impairment losses on Finnvera plc’s receivables and guarantee losses: EUR 14 million (Q1/2011: EUR 23 million)

During the period under review, demand for export credit guarantees and special guarantees rose to EUR 1.5 billion, which was 65 per cent more than during the corresponding period in 2011. In contrast, demand for SME financing was 18 per cent lower than during the first quarter of 2011.

“Seasonal variation and some individual large export projects under negotiation had an impact on the demand for export financing. In SME financing, the sluggish economy and the low level of investments reduced demand and the volumes of financing granted. From the perspective of SMEs, bank financing is working well in Finland, but when it comes to export financing, banks are more cautious and hope that Finnvera would increasingly often participate in financing projects to share the risk with banks. The new model for financing export credits will also be put into use during the current year,” says CEO Pauli Heikkilä.

The total value of offers pertaining to exports was more or less at the same level as during the corresponding period the year before. The total value of loans and domestic guarantees granted was 11 per cent less than during the first quarter of 2011.

The volume of venture capital investments was at the same level as the year before. In contrast, the business angel network expanded markedly during the period under review.

Financial trend

The Finnvera Group’s profit came to EUR 23 million, or EUR 13 million more than during the first quarter of 2011. The parent company’s profit was EUR 23 million (11 million). The main factors contributing to the better result were smaller impairment losses on receivables in SME financing and decreased guarantee losses.

Export financing accounted for EUR 14 million of the profit. In export financing, no major losses were recorded and no major increases were made in provisions for losses. The profit from domestic credit and guarantee operations was EUR 9.0 million.

Future prospects and impending risks

Demand for SME financing is likely to remain at a low level throughout the year. The focus will probably still be on financing for working capital and for the needs of export trading. SMEs have expressed more interest in financing services for export trade; one factor contributing to this trend is Finnvera’s SME Export Finance Programme.

The outlook for the world economy includes many uncertainties. However, demand for export financing is estimated to continue brisk.

According to the current estimate, Finnvera’s financial performance for this year is likely to remain at the same level as in 2011. If more risks materialise at the same time as the economy dips, the estimated profit may diminish considerably.

Interim Report 1 January - 31 March 2012 (PDF)

Additional information:
Pauli Heikkilä, Chief Executive Officer, tel. +358 29 460 2400
Topi Vesteri, Executive Vice President, tel. +358 29 460 2676
Annamarja Paloheimo, Senior Vice President, tel. +358 29 460 2539
Ulla Hagman, Senior Vice President, Finances and IT, tel. +358 29 460 2458

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