June 7, 2022
CFO insight into Q1: An active start for 2022
The first quarter of the year was marked by the Russia’s war in Ukraine as well as the continuous fight against the COVID-19 crisis and challenges in many markets.
Despite the challenging situation, Finnfund had an active start of the year:
- In Q1, Finnfund made six new investment decisions, with a combined value of 78 million euros.
- There was one signed investment as OP Finnfund Global Impact Fund I made a 7 million US dollar equity investment in d.light.
- Our portfolio grew by 12 million euros or by 2.0%, reaching 671 million euros.
- The interest income increased by 6.7% compared to Q1/2021 (EUR 5.1 million vs. EUR 4.8 million). However, the net interest income increased only by 2.7% from the previous year, reaching 3.8 million euros (EUR 3.7 million). The interest expenses increased by 24% compared to Q1/2021. Instability of the world has rapidly raised the USD reference rates and it impacts sooner the interest expenses sooner more than the interest income. We expect this to be balanced later this year.
- The net financial income increased 45% compared to Q1/2021 (EUR 5.4 million vs. EUR 3.8 million).
- Operational expenses increased by 1.7% compared to Q1/2021 but remained 13%, below the budget.
- The profit for Q1 before a reduction in the value of investments and sales gains and losses was 2.2 million euros (EUR 0.3 million).
- The net write-downs were positive during the period, 388 thousand euros in total. This was resulted by positive performance of fund portfolio. Extraordinary activity in valuation item rows was due to two old projects. One was closed and the other was converted. However, the net impact of these transactions was zero.
- The profit for Q1 was 2.6 million euros (EUR 0.6 million).
Despite global, regional, and national crises and political turmoil in many parts of the world the news from some countries are positive and , we expect the year 2022 to be a good one positive year for Finnfund.
The Russian war invasion of Ukraine will clearly affect the scenarios, and the markets that have already suffered the most from the pandemic will very likely take a new hit. Higher food and energy prices plus the monetary policies intended to fight inflation will aggravate food insecurity and create new challenges for the poorest countries.
Finnfund will continue to invest where it is needed the most.
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