Audited JSC Development Finance Institution Altum Consolidated and Separate Annual Report for the Year Ended 31 December 2020
Inside information, 2021-04-01 12:05 CEST --
In accordance with the audited report JSC “Development Finance Institution Altum” Group (hereinafter referred to as - Altum Group) has made a profit of 5.5 million euros in 2020. Altum Group’s operating result in the audited report is equal to the operating result of the operative financial report for 2020.
In 2020, the Group’s financial instruments portfolio increased by 30.2% (186 million euros) in terms of volume and by 18.5% (4,141 projects) regarding the number of projects. Mostly, the increase of the Group’s portfolio in 2020 was ensured by the Group’s specialised financial instruments for Covid-19 effect mitigation leading to the portfolio increase by 103.7 million euros. At the same time, there was a very high demand for Altum's regular financial instruments during the reporting period, which significantly contributed to the growth of the portfolio and confirmed that business had continued even in the conditions of a viral pandemic.
In 2020, the loan portfolio increased by 77.3 million euros (+34.4%), while the number of transactions in the loan portfolio increased by 274 (+4.5%). In turn, during the 2020, the volume of new loans issued amounted to 138.2 million euros, of which 72.5 million euros were issued under the regular support programmes, but 65.7 million euros were issued through implementation of the Covid-19 crisis-related loan programme.
In 2020, the guarantee portfolio increased by 75.4 million euros (+26.5%), while the number of projects in the guarantee portfolio increased by 3,650 projects (+23.4%). In turn, during 2020, there were issued new guarantees for 137.4 million euros, of which the most or 97.4 million euros were issued under the regular support programmes, while 40 million euros were issued under the Covid-19 effect mitigation support programmes.
JSC Development Finance Institution Altum Group’s (hereinafter – Altum Group) outstanding financial instruments portfolio (gross) is of 804 million euros as at 31 December 2020, comprised by 26,578 contracts, including:
guarantees portfolio of 360 million euros, the total number of contracts 19,265;
loan portfolio of 302 million euros, the total number of contracts 6,323;
investments in venture capital funds for the total amount of 73 million euros, the total number of projects financed by funds 268;
Land Fund of 68 million euros, the total number of transactions 722.
Reinis Bērziņš, Chairman of the Management Board of Altum:
“The financial result achieved in 2020 is lower than it was forecast before the viral pandemic, but at the same time it corresponds to the current situation. Considering the circumstances of the crisis, when assessing the creditworthiness of companies, a grace period has been granted to part of the clients. Following the International Financial Reporting Standards, this has resulted in a prudent allowance policy for both this initiative and provisions for new business, which reflects in a roughly twofold decrease in profits. The previous year of ALTUM's operation was marked by several significant events. For the first time, ALTUM's financial instruments portfolio exceeded the threshold of 800 million euros. This was achieved through the targeted development of existing and new solutions to address market gaps, including liquidity support instruments for companies to overcome the effects of Covid-19, the demand peak experienced in the first months of the pandemic. Secondly, despite the viral pandemic, we saw a high demand for ALTUM's routine financial instruments. Last year, the volumes of SME growth loans and loans for acquiring agricultural land and also the programme of small loans for rural areas increased, where the amount of allocated funding increased by more than 80% compared to 2019. Noteworthy is the Land Fund, the volume of which grew by 72% in the last 12 months compared to the previous year. Thirdly, we have started a number of new initiatives. Among them is ALTUM's involvement in the Three Seas Initiatives Investment Fund, a new additional financial instrument for financing regional infrastructure projects. The creation of the ALTUM Capital Fund is to be singled out as well, which is a special instrument established together with the private sector to support large companies that under the Covid-19 impact are ready to alter their current operations through changing the business model, adapting product development, introducing new technologies and entering new export markets. The year 2020 was a year of rapid growth for ALTUM, and we are prepared to continue performing our complementary role in the financing market in 2021, supporting both those who need short-term aid and those who plan meaningful long-term investments, but for some reason do not qualify for bank financing.”
JSC Development Finance Institution Altum is a Latvia state-owned company that ensures access of the enterprises and households to the financial resources by means of support financial instruments - loans, guarantees, investments in venture capital funds - in the areas defined as important and to be supported by the state, thus developing the national economy and enhancing mobilization of the private capital and financial resources. On 25 March 2019 Moody’s Investors Service (Moody’s) reconfirmed Altum’s Baa1 long-term issuer rating, with outlook stable. The baseline credit assessment (BCA) was upgraded to investment grade rating baa3. The assigned Moody’s rating of Altum is one of the highest credit ratings assigned to corporate entities in Latvia. On 24 October 2017 the bonds issued by Altum were listed on a regulated market – Baltic Bond List of Nasdaq Riga.
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