FINANCIAL HIGHLIGHTS
• Post-employment benefits
OFID sponsors defined benefit pension and medical plans for its non-local employees. In a defined benefit plan, the amount of benefits payable to an employee upon retirement is predetermined in relation to indices other than the employee’s past contributions or returns on the plan’s investments. The plans receive regular contributions from participating employees and the sponsor; these contributions plus any return on investment minus benefits paid constitute the plan’s assets.
Post-employment benefits include staff retirement plan, a medical benefits plan and other employee benefits such as annual leave compensation; housing and family allowances; end-of-service grant; relocation grant; and removal expenses to eligible employees, the present value of the projected benefits obligation constitute the plan’s liability.
• Equity
Equity is defined as the Member Countries’ contributions called plus reserves. Reserves comprise general reserve, reserves for grants, and other reserves. OFID’s equity at the end of 2018 was $7,203m, of which $4,262m comprised Member Countries’ contributions, and the balance was reserves.
General reserve is cumulative net income since the inception of OFID up to the reporting date less any
Summary of financial results
In 2018, OFID recorded a net income of $84m, a reduction from $169m recorded for 2017. The main contributors to this profit were income from loans, equity invest- ments and guarantees, which account for $197m, roughly 13% higher than in 2017. While gains from the investment portfolio in the amount of $17m show a reduction from $156m recorded in 2017, which is
adjustments and transfer to the reserve for grants.
• Provision for Impairment
The provisions for developing financing are based on the Expected Credit Loss model as described in the IFRS 9 standard.
OFID calculates the projected Loan Exposure and Loss Given Default (LGD) internally for each loan portfolio and combined these items with the Probability of Default (PD) from external sources. All these factors were included in the 3 Stages of the IFRS 9 ECL-provisioning principle. Each loan in OFID’s portfolio was assigned with a Credit Rating based on Internal Credit Rating system.
Provisions for Impairment are counter-asset accounts netted against the Outstanding of the loan portfo- lios, to ensure that the carrying amount reflects the loans’ fair value.
due to lower unrealized fair value gains. Another key difference to 2017 was the provision made for impair- ments in 2018 in the amount of $64m compared to $108m in 2017.
Allowing for comprehensive income allocations, net of grant disburse- ments, in the amount of $73m, OFID’s reserves increased from $2,867m at the end of 2017 to $2,941m at the end of 2018.
Independent Auditor’s opinion
In accordance with Article 4.02 (iv) of the Agreement Establishing OFID, the Ministerial Council appointed KPMG Austria GmbH as OFID’s external auditor. The auditor pro- vided an unqualified opinion on OFID’s financial statements as at December 31, 2018 which were prepared in accordance with IFRSs.
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