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13 Financial income and charges

 
Financial income1st half 20121st half 2011Changes
Derivatives on exchange rates35,54413,89821,646
Income from measurement at fair value of financial liabilities 3,27414,026 (10,752)
Banks 3,0763,198 (122)
Customers2,4591,740719
Capital gains on equity investments and dividends from other
companies
1063868
Other financial income 1,141895246
Total45,60033,79511,805

 

Financial losses1st half  20121st half 2011Changes
Bond loans48,14742,5885,559
Interest rate and foreign exchange derivatives24,41830,681 (6,263)
Charges from measurement at fair value of financial liabilities 16,814 -   16,814
Discounting of provisions and financial leases7,0157,379 (364)
Mortgages5,7465,420326
Bank current account overdrafts1,6611,441220
Capital losses and write‐downs of equity investment416230186
Other financial losses6,0514,233 1,818
Total110,26891,97218,296

The change in the financial operations is described, overall, in the Directors' Report.

The most significant items are described hereunder.

For the items "Income and charges from measurement at fair value of financial liabilities" and "Interest rate and foreign exchange derivatives", please see note 21 of the balance sheet.

As regards "Bonds", charges comprise the following:

  • EUR 42,583 thousand in financial charges actually paid (EUR 36,718 thousand in 2011);
  • EUR 5,564 thousand in financial charges generated by the valuation of said financial liabilities at amortised cost (EUR 5,870 thousand as at 30 June 2011). With regard to the method used, please note that in the recalculation, the maximum duration of the loans was assumed, and it was also assumed that the put options would not be exercised for the duration of the same loans, within the terms set out in the contract.

 

The increase in charges, with respect to the previous period, is primarily attributable to the change in the net financial indebtedness which, as at 30 June 2012 was equal to EUR 2,099 million, compared to EUR 1,971 million as at 30 June 2011.

For details on bonds subscribed by Hera Spa, please refer to note 31 "Banks and medium/long- and short-term loans".

"Capital gains on equity investments and dividends from other companies", amounting to EUR 106 thousand, relate to dividends received in the first half of 2012 from the companies Service Imola Srl and Banca di Credito Cooperativo.

"Capital losses and write-down of investments" are composed of capital losses recorded as a result of the following transactions:

  • disposal of the equity investment in Dyna Green Srl, EUR 46 thousand;
  • closure of liquidation of the companies Solhar Bentivoglio Srl, Solhar Ferrara Srl, Solhar Modena Srl e Solhar Faenza Srl, for a total amount of EUR 16 thousand;
  • exercise of the withdrawal right in Democenter Scral, following the transformation of the company from cooperative with limited responsibility to foundation, totalling EUR 29 thousand;
  • write-down of the equity investment in Wimaxer Spa, totalling EUR 325 thousand, following the share capital reduction to cover previous losses.

 

As for "Other financial charges", the item mainly includes the charges borne for the non-without recourse factoring of receivables, amounting to EUR 5,213 thousand (EUR 3,758 thousand as at 30 June 2011).

The item "Discounting of provisions and financial leases" is broken down as follows:

 1st half 20121 half 2011Changes
Landfill post-closure provision2,7892,824(35)
Employee leaving indemnity and other benefits2,095831 1,264
Restoration of third party assets1,9913,479 (1,488)
Finance leases140245 (105)
Total7,0157,379(364)

The increase in financial charges of item "Employee leaving indemnity and other benefits", compared to the first half of 2011, is due to the change in the method of measuring the discounting rate by using the treatment of actuarial calculations in application of clarifications issued by the Board of Actuaries in May 2012.

The decrease in financial charges related to item "Restoration of third party assets" is attributable to the extended duration of concessions regarding the environmental services in the provinces of Bologna and Florence, as well as the water service in the provinces of Pesaro-Urbino and gas in the province of Forlė-Cesena. These concessions were due to expire on 31 December 2011.

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