27. Financial expense (income)
Financial expense (income), which amounted to €510 million (€380 million in 2015), can be broken down as follows:
| Download XLS (17 kB) |
(€ million) |
2015 |
2016 |
Financial expense (income) |
363 |
624 |
Financial expenses |
366 |
624 |
Financial income |
(3) |
|
Other financial expense (income) |
17 |
(115) |
Other financial expense |
21 |
11 |
Other financial income |
(4) |
(126) |
Losses (Gains) on hedging derivatives – ineffective portion |
|
1 |
Losses on derivative contracts |
|
1 |
|
380 |
510 |
| Download XLS (18 kB) |
(€ million) |
2015 |
2016 |
||
|
||||
Financial expense (income) |
363 |
624 |
||
|
|
|
||
Expense on financial debt: |
395 |
647 |
||
- Interest and other expenses on bond loans |
364 |
622 |
||
- Fees on loans and bank credit lines |
16 |
13 |
||
- Interest expense on credit lines and loans due to banks and other lenders |
15 |
12 |
||
|
|
|
||
Financial expense capitalised |
(29) |
(23) |
||
|
|
|
||
Income from financial receivables: |
(3) |
|
||
- Interest and other income from financial assets not held for operations |
(3) |
|
||
|
|
|
||
Other financial expense (income): |
17 |
(115) |
||
|
|
|
||
- Interest income on financial receivables held for operations |
|
(123) |
||
- Other income |
(4) |
(3) |
||
- Accretion discount (*) |
12 |
10 |
||
- Other expenses |
9 |
1 |
||
|
|
|
||
Losses (Gains) on hedging derivatives – ineffective portion |
|
1 |
||
|
380 |
510 |
||
Expense on financial debt (€647 million) is mainly related to: (i) interest expense and other expenses on bond loans (€622 million) with reference essentially to the expenses from the liability management transaction57 (€329 million) which led to the buying back on the bond market for a total nominal value of €2.75 billion with an average coupon of approximately 3.3% and a remaining term of around 3 years and to interest on 15 bond loans (€293 million); (ii) the portion pertaining to the year of up-front fees on revolving credit lines (€7 million) and fees on unused credit lines (€5 million); and (iii) interest expense payable to banks relating to revolving credit lines, uncommitted credit lines and maturing loans totalling €12 million.
Financial expense capitalised (€23 million) is related to the portion of financial expense capitalised pursuant to investment activities.
Net financial expense (€115 million) mainly relates to: (i) income from adjustment of financial receivables from the Italgas Group from the operation of separating the natural gas distribution business from Snam (+€119 million); ii) expenses connected to the accretion discount on the provision for storage and transportation sector site dismantling and restoration provisions (+€10 million in total); (iii) income from the Shareholders’ Loan granted to TAP (+€2 million).
57 There is more information on the transaction in the chapter, ”Snam in 2016 – Main events” in the Directors’ Report.