Financial performance

Financial results

Net profit for the financial year ending 31 December 2024 was €297 million, resulting in a €232 million increase compared to the profit over 2023 of €65 million. FMO’s mainly USD-denominated investment portfolio was positively impacted by the strengthening of the USD against the Euro over the course of 2024. This mainly impacted the Private Equity portfolio, where foreign currency gains on the portfolio were €116 million for the year (2023: €62 million loss). This coincided with increases in the underlying capital value of the private equity portfolio of €45 million and negative realized results of €23 million (2023: €13 million gain and €9 million gain respectively). FMO’s share in the results of associates and joint ventures increased by €13 million in 2024 with a gain for the year of €39 million (2023: €26 million).

Results for the year were also positively impacted by improvements in credit risk related to certain debt customers, allowing for a release of loan impairments. The release of loan impairments for the year was €26 million, compared to impairments of €40 million in 2023. The NPE ratio21 for the lending portfolio on 31 December 2024 was 7.0 percent, down from 9.8 percent in 2023, due to some loans returning to performing status, this was driven mainly from exposures in Uganda. The reduction also results from write-offs on other long outstanding exposures.

Interest income for the year was €556 million (2023: €533 million) and interest expense €330 million (2023: €311 million). This results in net interest income increasing by €4 million compared to 2023. Regular income21 also increased compared to 2023 with a result of €300 million (2023: €292 million).

The results for other pertinent line items were as follows:

Fair value movements on treasury derivatives and fair value loans resulted in a loss of €27 million, and a gain of €12 million respectively (2023: €20 million loss and €15 million gain respectively)
Operating expenses increased to €191 million (2023: €178 million), which was mainly a result of increases in staff-related costs.

Cash flow

The net cash flow for the year was an outflow of €397 million. Net cash flows from operating activities amounted to an outflow of €317 million. Cash outflows relate primarily to disbursements from new investments in the lending portfolio, as well as additional investments in interest-bearing securities.

Capital position

On 31 December 2024 FMO’s capital position remained above the minimum levels required by the Dutch Central Bank as well as the requirements of FMO’s own internal Risk Appetite Framework. The total capital ratio decreased to 21.3 percent (2023: 23 percent). The CET–1 ratio decreased to 20.4 percent (2023: 22 percent).21

FMO’s liquidity ratios remained within the regulatory limits with a liquidity funding ratio (LCR) of 686 percent for the current financial year. The survival period was more than 12 months (2023: more than 12 months). The net stable funding ratio (NSFR) was 114 percent at the end of the financial year (2023: 114 percent).

FMO maintained its AAA ratings from both Fitch and Standard & Poor's during the financial year. FMO’s funding portfolio increased by €270 million, where redemptions were offset by new bond issuances totaling approximately €1,214 million.

Proposal for appropriation of the net result

Taking into account the conditions set out in the State-FMO Agreement of 1 July 2023, the Management Board and Supervisory Board propose allocating the net profit as follows: distribution of €10.6 million as a cash dividend (€26.48 per share) and allocating the remaining net profit of €286.6 million to the contractual reserve.

Risk and uncertainties

FMO’s primary risk exposures are investment risk (credit risk, equity risk, concentration risk and counterparty credit risk), market risk and liquidity risk. FMO monitors developments in these areas on an ongoing basis. This includes assessments of the impact of broader global macro-economic trends, such as increasing interest rates and foreign exchange rate movements, as well as more acute impacts arising from country- or region-specific political or environmental events. Risk levels are continuously measured against predefined risk tolerances and proactive measures are taken when challenging events take place.

Risks and uncertainties also arise in the financial reporting processes related to investment valuations, the estimation of expected credit losses and impairments on the lending portfolio, and the treatment of large, structured investments. These processes rely on professional judgement, therefore there is an inherent degree of uncertainty that arises in accounting for these items. FMO embeds controls in the financial reporting and valuation processes to ensure all estimates are reasonable and free from bias.

Further information

For more details and analysis on the financial performance, please refer to the 'Consolidated statement of profit or loss' sub-chapter in the 'Consolidated financial statements'. For more information on developments related to equity investments, ECL allowances and impairments, funding, and liquidity, please refer to the 'Equity risk', 'Credit risk' and 'Liquidity risk' sections in the 'Risk Management' chapter.

21 This is an alternative performance measure (APM) that is not included in the financial statements. For a definition of this APM, please refer to the chapter ‘Alternative Performance Measures’.