[13] Financial expenses
Financial expenses break down as follows: > TABLE 048
|
Financial expense |
|
048 |
|
in € million |
2014 |
2013 |
|
Interest expense from loans |
12.5 |
59.1 |
|
Interest expense from corporate bond |
40.5 |
65.2 |
|
Interest cost of leases |
48.1 |
43.0 |
|
Net interest expense from defined benefit plans |
20.4 |
18.7 |
|
Amortisation of finance costs |
10.3 |
30.2 |
|
Foreign currency exchange rate losses (financing) |
3.5 |
9.6 |
|
Interest cost of non-current financial liabilities |
1.8 |
1.2 |
|
Other interest expenses and similar charges |
36.2 |
41.5 |
|
Total financial expense |
173.2 |
268.4 |
Interest expenses arising from loans and interest expenses from corporate bond decreased by a substantial €46.6 million and €24.6 million respectively in 2014 because the IPO resulted in a vastly improved funding structure and funding conditions compared with 2013. In the reporting year, interest expenses arising from loan liabilities related to a low-interest revolving credit facility under the SFA, whereas in the previous year they largely related to a number of higher-interest loan liabilities under the SFA amounting to €32.4 million and losses of €26.7 million on interest-rate swaps.
The interest cost of leases relates to the interest portion of lease payments in financial services transactions in which the material risks and rewards are borne by KION Group entities as lessees (finance leases). Sale and finance leaseback operating sub-leases (SALB-FL-OL) incurred interest expenses of €27.2 million (2013: €24.0 million). The income from corresponding customer agreements is, according to IAS 17, a component of the rental and lease payments received and is therefore reported within revenue rather than as interest income.
Net interest expense from defined benefit plans relates to the net interest cost of the net liability of pension plans applying the discount rate for plans in which pension obligations exceed plan assets.
Early repayment in April 2014 of the fixed-rate tranche of the corporate bond issued in 2011, which was due to mature in 2018 and had a volume of €325.0 million, and the floating-rate tranche of the corporate bond issued in 2013, which was due to mature in 2020 and had a volume of €200.0 million, led to non-recurring financial expenses. An amount of €8.4 million representing the proportion of the deferred finance costs relating to these bonds was recognised as an expense as amortisation of finance costs. A payment of €14.8 million representing early repayment charges was recognised as other interest expenses and similar charges.
Foreign currency exchange rate losses (financing) included losses on derivative financial instruments amounting to €0.4 million (2013: €6.6 million).