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Sustainable development results with high ambitions

News   •   Jun 25, 2019 11:16 UTC

Today, private sector is driving the development of Africa's economy by creating four out of five jobs and bringing together 33 per cent of Africa's GDP. For 40 years, Swedfund’s mission has been to fight poverty by investing in sustainable businesses in the world's most challenging countries. Job creation has always been the core of our work.

This is the sixth year Swedfund presents a fully integrated report, where the results are reported by and presented according to our three pillars: impact on society, sustainability and financial viability.

- In our Integrated Report we show solid development results, with an increasing number of employees, an increased proportion of females in our portfolio companies and concrete value creation within sustainability. We have a five-fold increase of our renewable energy portfolio. Our ambition is to grow further. We do this through targeted and sustainable investments that create more decent jobs, offer financing for entrepreneurs, limit climate change and increase women's empowerment,” says Maria Håkansson, CEO at Swedfund.

In 2017, Swedfund's portfolio companies and funds’ underlying holdings contributed to approximately 167,000 jobs. The proportion of women in senior management in Swedfund's investments increased from 22% to 25%. In total, Swedfund's portfolio companies and the funds and their underlying holdings contributed approximately SEK 5 billion in tax. This is an increase of just over 40% from 2016. We also see an increase in our portfolio companies regarding all indicators within our pillar Sustainability, this includes compliance with the ILO core conventions and the existence of management systems for sustainability issues and anti-corruption issues.

With a capital injection from the Swedish Parliament equivalent to SEK 600 million and through reflows from our portfolio, Swedfund has invested SEK 1,069 million, which is considerably more than previous years.

Operating profit (EBIT) for 2018 amounted to SEK -55.3 million (50.1). This profit included SEK -44.2 million for write-downs attributable to a change in the method used for valuation of shares and mutual fund shares at fair value in accordance with IFRS. Adjusted for this non-recurring item, Swedfund recorded an operating profit (EBIT) of SEK -11.1 million (50.1) in 2018.

As a part of the portfolio restructuring, several holdings were exited in 2018, but capital gains have been limited and significantly lower than in 2017. Impairment losses, mainly related to older holdings, have also had a negative impact on EBIT. Given the limited size of the portfolio, individual transactions can have a major impact on EBIT, which as a result can vary considerably between quarters and between years.

- We have achieved our Costs/Income ratio, which is 0.88 (0.97), demonstrating that we are working in an appropriate and cost-effective manner on our vital mission – to fight poverty by investing in sustainable businesses, says Maria Håkansson.

Read With a Focus on Humanity, Swedfund's Integrated Report 2018