The Norwegian Church Endowment – Ovf
The Norwegian Church Endowment (Ovf) is regulated in the Norwegian constitution and its assets date back to the Middle Ages and the presence of the Roman Catholic Church in Norway.The fund is an independent legal entity, with the majority of assets in real property and financial assets.
Sustainable administration in accordance with church values
The aim of Ovf is to create sustainable financial results and deliver the financial outcome and provide homes to the benefit of the Norwegian Church. In managing property and securities for the fund, we are committed to taking into account ethical, cultural heritage and environmental considerations. We strive to ensure that the management and operations are in line with the ethical values and also commercially justifiable. Therefore we have:
About Ovf and yearly summary 2015
One of the fund’s major obligations is to provide homes for the Norwegian Church’s clergy. Ovf owns 345 vicarages, including bishops’ residences. 88 of these residences are listed cultural heritage properties. The total area of the buildings, including garages etc. is approximately 197 000 square meter.
By the end of 2018, Ovf had approximately 6 500 leaseholds, of which near 4 200 are let for residential and leisure purposes.
Ovf has a total of 154 farm leases. 131 of these are purely land leases for agricultural purposes. The 23 farms are primarily kept due to their cultural and historical heritage importance.
Cultural heritage properties
The long history and foundation of the fund has resulted in an extensive portfolio of cultural heritage properties. Ovf’s strategy is to maintain this portfolio.
Ovf owns 902 000 hectar of forests and uncultivated land. Around 56 % (503 000 hectar) is operated as commercial forestry. 81 600 m3 of timber is felled in the course of 2018, 10 % more than the previous year. Regeneration through growth and replanting of the forest accounted for approximately 164 000 m3 in 2018. Total forestry income was NOK 46 million in 2018, NOK 8 million more than in 2017.
Real property and estate development
Ovf is working with a substantial portfolio of property development prospects, including a few real estate developments. The main purpose of the property development is to regulate the sites before selling them. Some major sites, in high value areas, are to be developed and kept with a view to further increasing the fund’s annual operational cash flow. Many of the projects are to be transferred (sold) to Clemens Eiendom, Ovf’s wholly owned subsidiary.
Clemens Eiendom is a real estate company which is engaged in commercial development of Ovf’s properties. Clemens Eiendom is also the manager of Ovf’s commercial real estate properties.
Small Hydro-Electric Power (HEP) plants
Small Hydro Electric Power is a business area that exploits Ovf’s waterfall rights. The business area is organized in its own subsidiary; Clemens Kraft. Clemens Kraft AS, has partial ownership in 34 operational power plants. Ten power plants will be under construction in 2019 with the intention to further increase the portfolio in the years to come. Clemens Kraft is a leading player in this field in Norway.
Grants for ecclesiastical purposes
Pursuant to section 2 of the Act governing the Norwegian Church Endowment, Ovf’s activities shall benefit the Norwegian Church as a whole. Grans and contributions are given in various forms, both financial and in terms of the endowment maintaining homes for clergy in the Norwegian Church. The Endowment provides services of various kinds which the recipient does not pay market prices or cost absorption prices for.
Total disbursements of the Norwegian Church, including the rehabilitation of housing for the clergy, amounted to NOK 101 million in 2018, compares to NOK 136 million in 2017.
In 2018, Ovf spent a net NOK 51 million on operation and refurbishment of homes for the clergy. This figure includes operating costs, maintenance costs and upgrading costs, adjusted for rental income.
Ovf is offering better-than-market loans to church related purposes and has per the end of 2018 almost NOK 90 million in outstanding loans. The benefits in kind amounts to NOK 1.4 million as a result of subsidized interest margins. Ovf has also contributed directly by way of financial support in order to establish and operate Kirkepartner IKT so that the Norwegian Church’s IT strategy can be realized.
In addition to the benefits mentioned above, the Endowment has made various financial contributions for ecclesiastical purposes. In 2018, these aggregated to NOK 48 million. These financial contributions comprise contributions for ecclesiastical purposes and contributions to country council owned rectories/clergy homes.
In 2018, financial terms contributed a book profit of NOK 53 million compared to NOK 157 million in 2017. The fall in net financial result was mainly due to extraordinary profit in 2017.
Summary of annual accounts
Ovf’s net operating income was NOK 315 million in 2018, up from NOK 384 million in 2017. Operating costs totaled NOK 222 million, at the same level as in the previous year.
Ovf’s net income in 201 was NOK 98 million, down from NOK 236 million previous year.
(Amounts in NOK 000s)
|Net income||97 950|
|Capital Fund||91 652|
|Other Equity||6 299|
|Total allocations||97 950|