FMO, the Dutch Development Finance Company, published its 2015 annual results today. A record net profit of EUR 174 million (2014: EUR 124 million) will enable further green and inclusive investments and support job creation in developing countries. You can find the Annual Report 2015 on our website: fmo.nl. The publication of this annual report takes place at a time when FMO had to make the decision to suspend its activities in Honduras, because of the deteriorating human rights situation in the country.
Find the full report here.
Highlights impact 2015
• First outcomes of the FMO Impact Model show that 858,000 (in)Direct Jobs (FTEs) were supported and 936,000 (tCO2eq) Green House Gas emissions were avoided
• Issuance of a second Sustainability Bond for a total value of EUR 500 million
• Record new green investments of EUR 685 million, up 29% from EUR 530 million in 2014
• Launch of Climate Investor One Fund and NN FMO Emerging Markets Loans Fund
Highlights finance 2015
• Net profit amounts to EUR 174 million, up from EUR 124 million in the same period in 2014
• Total income up by EUR 60 million to EUR 320 million, driven by the performance of our loan portfolio and a favourable US dollar-euro exchange rate development
• Committed portfolio grows to EUR 9.2 billion
|
(x EUR million) (unless otherwise stated) |
|
2015 |
2014 |
Δ% |
|
(In)Direct Jobs supported (FTEs) |
|
858,000 |
n/a |
n/a |
|
Avoided GHG emissions (tCO2eq) |
|
936,000 |
n/a |
n/a |
|
Green investments |
|
6851 |
530 |
+29% |
|
Total income |
|
320 |
260 |
+23% |
|
Total expenses |
|
79 |
62 |
+27% |
|
Value adjustments |
|
29 |
51 |
-43% |
|
Taxes |
|
41 |
25 |
+64% |
|
Net profit |
|
174 |
124 |
+40% |
|
Total committed portfolio (€ billion) |
|
9.2 |
8 |
+15% |
|
New commitments |
|
1,5842 |
1,632 |
-3% |
Impact developments 2015
We started in 2015 three innovative initiatives: Climate Investor One and ElectriFi in the field of energy finance and the Development Business Partner initiative to provide infrastructure finance for Dutch companies investing in emerging markets. These initiatives have in common that they blend public and private financing sources and support project development from identification, to equity finance, through to debt finance. These are innovations that will help in building new coalitions between public and private investors, in pooling their particular types of capital and hence investing bigger amounts in green and inclusive projects over time. In April 2015 FMO successfully issued a second Sustainability Bond, with a maturity of 7-years and a total face value of EUR 500 million. The proceeds of the Sustainability Bond support the financing of Green and Inclusive Finance Projects according to FMO’s Sustainability Bonds framework. In cooperation with NN Investment Partners FMO Investment Management launched the NN-FMO Emerging Markets Loans Funds in May 2015. This fund takes advantage of the expertise and underwriting skill of FMO as the investments will mirror loan investments made by FMO. Through participation in the fund, institutional investors are offered the opportunity to invest in emerging markets corporate loans, an attractive asset class that traditionally has a high barrier to entry.
Financial developments 2015
Total committed investment portfolio increased to EUR 9.2 billion (2014: EUR 8 billion). Despite the challenging market environment, the level of profitability increased. Total income in 2015 was EUR 320 million (2014: EUR 260 million), mainly due to higher interest income. A record net profit of EUR 174 million (2014: EUR 124 million) will enable further green and inclusive investments and support job creation in developing countries. The quality of our portfolio remained fairly stable throughout the year.
Outlook 2016
In the first months of 2016 FMO has to deal with a difficult situation in Honduras. It has become clear in the first quarter of 2016 that the human rights conditions in Honduras are deteriorating, in particular the safety and protection of Human Rights activists that voice their opposition to commercial projects. FMO rejects violence, and has called upon the Honduran government to do everything in its power to protect those that speak up. In reaction to the extraordinary situation in Honduras, FMO has decided to suspend all its activities in the country.
Financial outlook 2016
Overall outlook for 2016 is neutral with unpredictable factors such as geopolitical and social tensions, as in Honduras, the ongoing volatility of financial markets, the oil prices and the stability of the US dollar-euro exchange rate. A further slowdown of the world economy (especially in China) could have an impact on our markets and hence on our investments. We continue to monitor the global and local developments closely and will react if deemed necessary.
Nanno Kleiterp, FMO’s CEO: “It is important to note that 2015 was a remarkable year. On the one hand we experienced the disruptive effects of changing weather patterns, terrorist attacks and migration as symptoms of the deep seethed problems of climate change and inequality. On the other hand, I also feel that 2015 was a year of hope for a better future for this generation and for our children. The new UN sustainability goals to shift toward a greener and more inclusive future in 2030 and the results of COP21 in Paris are strong signals that the move to a sustainable future is by now felt to be urgent on a global scale.
That is an encouragement to move ahead with our strategy to become the leading impact investor. It is also a major opportunity to help and guide more public and private investors to our markets and to facilitate them to invest in worthwhile green and inclusive projects. We initiated several innovative initiatives with the Dutch government and business, which shall catalyze additional public and private funding to finance green and inclusive growth. And we achieved a record level of financial profit, while the quality of the portfolio did not materially deteriorate in a challenging economic environment.
I am proud of our support to our clients, helping them to cope with the economic volatility that characterized last year. The drop in commodity prices and the Chinese slowdown has had an impact on some of our clients and required us to be prudent in managing our risks, yet we still contracted and catalyzed transaction volumes of EUR 2.5 billion that supported more than 858,000 jobs and avoided more than 936,000 tons of greenhouse gases in our markets. The results of 2015 confirm FMO’s ability to realize true impact as well as generate healthy financial returns through our investments in developing countries and emerging markets. The Human Rights situation in Honduras, however, emphasizes the complex environment in which we have to operate to carry out our positive mission. It shows that FMO is a special business that must take into account that it is part of a broader stakeholder-community.”
About FMO
FMO is the Dutch development bank. As a leading impact investor FMO supports sustainable private sector growth in developing countries and emerging markets by investing in ambitious projects and entrepreneurs. FMO believes that a strong private sector leads to economic and social development, and has a 46-year proven track record of empowering people to employ their skills and improve their quality of life. FMO focuses on three sectors that have high development impact: financial institutions, energy, and agribusiness, food & water. With a committed portfolio of EUR 9.2 billion spanning over 85 countries, FMO is one of the larger bilateral private sector developments banks globally. For more information please visit www.fmo.nl.
Press contact:
Paul Hartogsveld
Senior Communications Officer (PR) T: +31 70 314 9928 M: +31 6 11589127 E: p.hartogsveld@fmo.nl
