Selected notes to the consolidated income statement
Share of profit (loss) of equity-accounted investments
The share of profit (loss) of equity-accounted investments in the first nine months of 2014 amounted to a loss of €31.5 million (Q1 – Q3 2013: loss of €0.3 million) and was largely the result of a write-down on the stake held in Linde Hydraulics GmbH & Co. KG, Aschaffenburg (referred to below as Linde Hydraulics), in the third quarter, which in turn was due to a downturn in business. The non-cash impairment loss calculated on the basis of an impairment test was €32.0 million.
Net financial income / expenses
Interest expenses arising from loan liabilities decreased by a substantial €48.1 million in the first nine months of 2014 because the IPO resulted in a vastly improved funding structure and funding conditions compared with the corresponding period of 2013. There was a countervailing effect on net financial expenses from the early redemption 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. An amount of €8.4 million representing the pro-rata deferred borrowing costs and a payment of €14.8 million representing early repayment charges were recognised as financial expenses.
Measurement of the put option of Linde Material Handling GmbH, Aschaffenburg, and the two call options of Weichai Power Co. Ltd., Weifang, China (referred to below as Weichai Power), on the remaining shares in Linde Hydraulics resulted in total income of €43.0 million in the first nine months of 2014 (Q1 – Q3 2013: expenses of €16.6 million). This income was offset by the expenses resulting from measurement of the equity investment in Linde Hydraulics, which are recognised under the share of profit (loss) of equity-accounted investments.
Income taxes
In the consolidated interim financial statements, current income taxes for the reporting period are calculated on the basis of the expected income tax rate for the full year. The rise in the deferred tax expense in the third quarter of 2014 was predominantly due to utilisation of loss carryforwards and interest carryforwards in respect of which deferred tax assets have been recognised.
Earnings per share
Basic earnings per share are calculated by dividing the net income (loss) accruing to the KION GROUP AG shareholders by the weighted average number of shares outstanding during the reporting period (Q1 – Q3 2014: 98,697,898 no-par-value shares; Q1 – Q3 2013: 76,346,342 no-par-value shares; Q3 2014: 98,693,761 no-par-value shares; Q3 2013: 98,863,795 no-par-value shares). In the first nine months of 2014, the KION Group generated net income accruing to the shareholders of KION GROUP AG of €117.4 million (Q1 – Q3 2013: €81.4 million). Diluted and basic earnings per share for the reporting period came to €1.19 (Q1 – Q3 2013: €1.07). The 251,000 no-par-value treasury shares which were repurchased by KION GROUP AG as part of a buy-back programme were not included in this figure as at 30 September 2014.
As at 30 September 2014, there were no equity instruments that diluted the earnings per share for the number of shares issued.