[13] Financial expenses

Financial expenses break down as follows: > TABLE 056

Financial expense

 

056

in € million

2016

2015

Interest expense from loans

16.0

10.2

Interest expense from corporate bond

18.9

30.4

Interest cost of leases

50.8

49.9

Net interest expense from defined benefit plans

18.7

17.1

Amortisation of finance costs

7.9

1.3

Foreign currency exchange rate losses (financing)

45.6

7.0

Interest cost of non-current financial liabilities

1.6

0.7

Other interest expenses and similar charges

25.1

27.3

Total financial expense

184.5

144.0

In 2016, financial expenses rose by €40.5 million year on year. This increase stemmed largely from the change in foreign currency exchange rate losses (financing) as a consequence of the rise in currency risk at the end of the year. The foreign currency exchange rate losses (financing) included gains / losses arising on hedging transactions in addition to the effects from exchange rate fluctuations.

The financial expenses also included one-off expenses in connection with the repayment of the syndicated loan dated 23 December 2006 that took the form of a revolving credit facility of €1,243.0 million and the €450.0 million corporate bond, which had been issued in 2013 and was due to mature in 2020. An amount of €5.4 million representing the deferred borrowing costs relating to the corporate bond at the time of early repayment and a cash payment of €15.2 million representing early repayment charges were recognised as financial expenses. In addition, an amount of €5.1 million representing the deferred borrowing costs relating to the previous syndicated loan at the time of early repayment was included in financial expenses. There was a countervailing effect from the savings on interest payments resulting from the optimised financing structure.

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 €28.3 million (2015: €27.8 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.