CFO Insights into Q2 2025

In the first half of 2025, Finnfund focused on executing its new strategy, including capital raising and the launch of a new fund. We made 12 new investment decisions totalling EUR 63 million. The portfolio value stood at EUR 744 million, down EUR 34 million from year-end 2024.

Revenue pressures emerged from two fronts: declining interest rates and a weakening USD against the euro. As most investments are USD-denominated and our financial reporting is in euros, this currency shift reduced euro-denominated income. Interest income fell 27% year-over-year in Q2 (EUR 13.8 million vs. EUR 18.9 million), while interest expenses remained stable. Net interest income dropped 49% (EUR 5.5 million vs. EUR 10.7 million), primarily due to the issuance of a EUR 200 million multi-tranche sustainability and green bond in early Q2.

Total net financial income for H1 was EUR 8.2 million, consistent with Q2 2024 (EUR 8.1 million), supported by a notable increase in fund income.

Operational costs—including administration, depreciation, and other expenses—remained stable and below budget.

The pre-impairment and sales result was a loss of EUR 1.1 million (vs. EUR 1.3 million loss). Q2 ended with a net loss of EUR 23.5 million (vs. EUR 7.2 million profit in Q2 2024), largely driven by EUR 26 million in provisions and sales losses from the forestry sector. Globally, the industry has been impacted by low product prices, affecting valuations across both developed and developing markets.

The overall environment remains challenging. While we have received early repayments from strong-performing debt investments, macroeconomic pressures have negatively affected others, leading to revenue and portfolio contraction. Nevertheless, our robust investment pipeline positions us for future growth. With a strategic emphasis on debt investments, we anticipate a gradual recovery, though a positive full-year result is unlikely without a major exit.

Olli Sinnemaa
Chief Financial Officer

P.S. Would you like to know more about our work? Read the latest newsletter – and subscribe.

Olli Sinnemaa Chief Financial Officer (CFO) olli.sinnemaa@finnfund.fi