In the third quarter of 2018, Export Credit Norway received 49 financing applications (Q3 2017: 45) representing a total application volume of NOK 16.4 billion (Q3 2017: NOK 22.3 billion). The number of applications is on a par with the corresponding quarter of last year, while the application volume is somewhat lower. Around 77% of the application volume – NOK 12.6 billion – related to ocean industries.
International emissions requirements take effect
Ballast-water treatment systems and exhaust scrubbers are accounting for an increasing proportion of ship-equipment applications, and Export Credit Norway’s application figures confirm that Norwegian companies are world-leading suppliers of these technologies.
“We have noted growing interest in financing for on-board scrubbing and treatment equipment in recent quarters. Demand is being driven by new international environmental standards related to both ballast water and fuel-based sulphur emissions, which are leading many shipping companies to fit their fleets with new systems. When a shipping company selects Norwegian equipment, we can provide financing for the purchase, thereby helping Norwegian suppliers to be competitive bidders,” says Export Credit Norway CEO Otto Søberg.
Ongoing growth in the renewables sector
Export Credit Norway has invested considerable time and energy in measures to assist non-ocean industries exporters in recent years. While loans in the industry and renewable energy segments currently account for just 4% of the company’s total lending portfolio, their share of the lending balance is growing steadily from quarter to quarter. Since Q3 2017, the lending balance related to these segments has more than doubled, from NOK 1.1 billion to NOK 2.3 billion.
“The mainland industry and renewables sectors are maintaining strong export growth, not least due to the low krone exchange rate. We expect this positive trend to continue, albeit with some variation among the many segments that make up these sectors,” says Søberg.
Increasing SME demand
Efforts to support small and medium-sized enterprises (SMEs), which comprise 99% of all Norwegian businesses, remains a high priority for Export Credit Norway. In the third quarter, the company received 24 applications (Q3 2017: 25) representing an application volume of NOK 4 billion (Q3 2017: NOK 4.5 billion) from SMEs. In other words, 49% of all financing applications received during the quarter came from SMEs. In financial terms, SMEs accounted for 24.5% of the total quarterly application volume.
“Export Credit Norway provides important advice and guidance to SMEs during the application process. This is consistent with our aim of helping to lift small and medium-sized enterprises,” says Otto Søberg.
Good access to capital
“Capital access appears to have returned to acceptable levels for some industries and certain customers. However, many customers are still choosing to apply for financing from us, as they have found that a financing offer from Export Credit Norway can be a decisive factor in winning a contract. In volume terms, the application inflow thus far this year already exceeds the full-year total for 2017, and our order book is growing” says Søberg.
In Q3 2018, Export Credit Norway signed new loan agreements totalling NOK 37 million (Q3 2017: NOK 2.3 billion), and disbursed NOK 263 million (Q3 2017: NOK 97 million) in new loans. The company’s lending balance amounted to NOK 63.7 billion at quarter-end, compared to NOK 68.1 billion the preceding quarter. The reduction in the lending balance is primarily due to a number of large early loan redemptions.
As at the end of Q3, 72% of Export Credit Norway’s lending portfolio was guaranteed by GIEK, with the remainder being guaranteed by Norwegian banks (14%) and foreign banks (14%).
Published 03. Dec 2018