CFO Insight into Q1/2024

Our Annual Report 2023 has been published. As Jaakko Kangasniemi, Finnfund’s CEO and Managing Director, puts it: happy to say that despite the global and local economic and political challenges, the year was a successful one.

As explained further in the Annual Report and our press release, in 2023, Finnfund exceeded its target for new investments, making 35 new investment decisions totalling EUR 256 million.

Profit for the year totalled EUR 3,803,242, and all of it will be used to make new investments.

A good start for this year

This year has started on a positive note. We successfully exited from our biggest investment, Lake Turkana Wind Power, the biggest wind farm on the African continent which accounts for up to 14% of Kenya’s electricity generation.

We also continued making new investment decisions; during the first quarter of this year, Finnfund made four new investment decisions, reaching a value of EUR 28 million. Our portfolio grew by EUR 23 million from the year-end of 2023, landing at EUR 745 million.

The interest income increased by 27% compared to Q1/2023 (EUR 9.5 million vs. EUR 7.5 million). The net interest income was approximately at the same level, as it grew 29% from the previous year, reaching EUR 5.4 million (compared to EUR 4.2 million).

The net financial income increased 42% compared to Q1/2023 (EUR 4.7 million vs. EUR 3.3 million).

The key explanation is that the raised interest rates have now been fully implemented in our debt portfolio, and the mismatch between the interest expenses and the interest income has disappeared.

Operational expenses decreased by 6% over the previous year’s Q1 and are at the budgeted level.

The profit before reduction in value of investments and sales gains and losses was EUR 145,000 (EUR -1,6 million in Q1 / 2023).

The profit for Q1 was EUR 23.2 million (EUR 0.6 million in Q1 / 2023).

The outlook for the financial year 2024 remains positive. While some of the Finnfund’s mandate countries have issued new sovereign bonds and the most severe situation has eased, the risk of a debt crisis still exists in some countries and some of our investee companies are in distress.

If the global situation continues as it is, the business environment, especially in the countries we invest in, will probably remain difficult. We keep on monitoring the situation, work closely with our investee companies – and are prepared to react accordingly.

Olli Sinnemaa
Chief Financial Officer, Finnfund

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Olli Sinnemaa Chief Financial Officer olli.sinnemaa@finnfund.fi