Notes to the consolidated statement of operations
Revenue recorded by the individual business segments developed as follows:
|26. Revenue EURm||2015/16||2014/15|
|Energy Trade and Supply||448.5||470.9|
|Network Infrastructure Austria||434.2||412.8|
|Energy Supply South East Europe||949.4||1,037.9|
|Strategic Investments and Other Business||10.1||9.3|
Revenue includes income of EUR 1.4m (previous year: EUR 5.3m) from contract work on international PPP projects (see note 40. Other non-current assets).
27. Other operating income
|27. Other operating income EURm||2015/16||2014/15|
|Income from the reversal of deferred income from network subsidies||43.7||38.7|
|Own work capitalised||20.9||18.2|
|Change in work in progress||–1.2||0.9|
|Interest on late payments||7.5||8.2|
|Income from the disposal of intangible assets and property, plant and equipment||–0.7||0.2|
|Miscellaneous operating income||11.8||33.8|
In addition to bonuses, subsidies and services that are not related to business operations, miscellaneous operating income in the previous year includes the results from the sale of the sodium hypochlorite plant.
The changes to insurance compensation resulted mainly from insurance compensation received for winter damage in South East Europe.
28. Cost of materials and services
The expenses for the purchase of electricity from third parties and the purchase of energy carriers consist primarily of the costs for electricity, natural gas, hard coal and biomass. Also included here are costs of EUR 12.3m (previous year: EUR 5.5m) for the purchase of additional CO2 emission certificates during the reporting period due to the insufficient allocation of free certificates.
Third-party services and other materials and services were related primarily to the project business in the Environmental Services Segment as well as services for the operation and maintenance of plants. This position also includes costs directly attributable to the required services.
|28. Cost of materials and services EURm||2015/16||2014/15|
|Electricity purchases from third parties and primary energy expenses||930.6||1,066.5|
|Third-party services and other materials and services||246.7||254.0|
29. Personnel expenses
Personnel expenses include payments of EUR 6.2m (previous year: EUR 6.2m) to EVN Pensionskasse as well as contributions of EUR 0.9m (previous year: EUR 0.9m) to EVN pension funds.
|29. Personnel expenses EURm||2015/16||2014/15|
|Salaries and wages||240.6||242.7|
|Compulsory social security contributions and|
|Other employee-related expenses||6.6||6.6|
The average number of employees was as follows:
|29. Employees by segment1)||2015/16||2014/15|
|Network Infrastructure Austria||1,227||1,254|
|Energy Trade and Supply||292||280|
|Energy Supply South East Europe||4,166||4,276|
|Strategic Investments and Other Business||504||501|
|1) Average for the year|
The average number of employees comprised 97.2% salaried and 2.8% wage employees (previous year: 96.2% salaried and 3.8% wage employees), whereby no distinction is made between salaried and wage employees in Bulgaria and Macedonia. Wage employees are therefore counted together with salaried employees in these countries.
30. Other operating expenses
|30. Other operating expenses EURm||2015/16||2014/15|
|Legal and consulting fees, expenses related to risks of legal proceedings||22.7||16.5|
|Write-off of receivables||20.7||37.2|
|Business operation taxes and duties||12.4||16.3|
|Transportation and travelling expenses, automobile expenses||10.0||10.4|
|Telecommunications and postage||9.6||10.6|
|Miscellaneous other operating expenses||28.8||39.4|
The position “legal and consulting fees, expenses related to risks of legal proceedings” also contains changes in the provision for legal proceedings. Rents also include the changes in the provisions for network access fees in Bulgaria.
Miscellaneous other operating expenses in the previous period included environmental protection expenses, fees for monetary transactions, licenses, membership fees and administrative and office expenses as well as the costs for the creation of a provision for impending payments from liabilities for EconGas GmbH.
31. Share of results from equity accounted investees with operational nature
|31. Share of results from equity accounted investees with operational nature EURm||2015/16||2014/15|
|ZOV; ZOV UIP||12.4||12.1|
The share of results from equity accounted investees with operational nature (see note 66. Disclosures of interests in other entities) has been reported as part of the results from operating activities (EBIT).
The share of results from equity accounted investees with operational nature consists primarily of earnings contributions, impairment losses recognised to assets capitalised in connection with acquisitions and other necessary impairment losses (see note 38. Investments in equity accounted investees).
The negative earnings contribution from the Verbund Innkraftwerke GmbH reflected the substantially lower estimates for the long-term development of electricity prices as indicated by current market analyses. The revised electricity price assumptions led to the recognition of an impairment loss of EUR 27.6m on the share of results from this equity accounted investee. In the previous year an impairment loss of EUR 26.8m had been recorded because of a substantial decline in estimates of electricity prices.
The negative earnings contribution from Shkodra Region Beteiligungsholding GmbH is due to the substantially lower estimates for the long-term development of electricity prices in connection with the Ashta hydropower plant. An impairment loss of EUR 4.1m was already recognised in the first quarter. The updated electricity price assumption led to a further impairment of the shares of EUR 4.1m as of 30 September.
The unrecognised cumulative losses of Shkodra Region Beteiligungsholding GmbH totalled EUR –7.1m (previous year: EUR 0.0m), while the unrecognised losses of Econgas GmbH amounted to EUR –7.6m in the previous year.
32. Depreciation and amortisation and effects from impairment tests
The procedure used for impairment testing is described in regard to the accounting policies under note 22. Procedures and effects of impairment tests.
|32. Depreciation and amortisation and effects from impairment tests by items of the consolidated statement of financial position EURm||2015/16||2014/15|
|Property, plant and equipment||326.6||300.3|
|Write-up of property, plant and equipment||–4.1||–2.4|
|32. Depreciation and amortisation and effects from impairment tests EURm||2015/16||2014/15|
|Scheduled depreciation and amortisation||266.1||260.3|
|Effects from impairment tests (impairment)1)||82.0||57.1|
|Effects from impairment tests (reversal of impairment)1)||–4.1||–2.4|
|1) For details, see notes 36. Intangible assets and 37. Property, plant and equipment|
33. Financial results
|33. Financial results EURm||2015/16||2014/15|
|Income from investments|
|WEEV Beteiligungs GmbH||–8.8||0.4|
|Share of results of equity accounted investees with financial nature||–8.7||0.4|
|thereof Verbund AG||14.0||11.6|
|thereof other companies||3.6||2.4|
|Results from other investments||14.4||11.6|
|Total income from investments||5.6||12.0|
|Interest income on financial assets||11.5||16.3|
|Other interest income||5.2||5.3|
|Total interest income||16.7||21.7|
|Interest expense on financial liabilities||–60.0||–65.2|
|Interest expense personnel provisions||–9.6||–10.5|
|Other interest expense||–7.8||–15.3|
|Total interest expense||–77.4||–91.1|
|Total interest results||–60.7||–69.4|
|Other financial results|
|Results of valuation gains/losses and disposals of non-current securities (@FVTPL)||–1.8||1.5|
|Other financial results||–2.1||–3.2|
|Total other financial results||–6.5||–2.9|
|*) Small amount|
Share of results of equity accounted investees with financial nature (see note 66. Disclosures of interests in other entities) is reported as part of the financial results.
WEEV Beteiligungs GmbH was founded together with the syndicate partner Wiener Stadtwerke Holding AG to participate in the capital increase by Verbund AG and was initially included in EVN’s consolidated financial statements at equity during the financial year of 2010/11. The adjustments to reflect the change in market value are recorded to the valuation reserve after the deduction of deferred taxes in accordance with IAS 39. However, IFRSs require the recognition of an impairment charge through profit or loss when there is a significant and lasting decline in the share price (see note 48. Valuation reserves). The unrecognised negative other results from WEEV Beteiligungs GmbH amounted to EUR 0.0m (previous year: EUR –2.7m).
Interest income on financial assets includes interest from investment funds that focus chiefly on fixed-interest securities as well as the interest component from the lease business. Other interest income generally relates to income from cash and cash equivalents and from securities recorded under current financial assets. The interest income from assets that are not designated at fair value through profit or loss totalled EUR 15.3m (previous year: EUR 20.2m).
Interest expense on financial liabilities represents regular interest payments on issued bonds and bank loans. Other interest expense includes the accrued interest expense on non-current provisions, expenses for current loans as well as lease costs for biomass equipment, distribution and heating networks. The interest expense on liabilities not designated at fair value through profit or loss totalled EUR 67.8m (previous year: EUR 74.6m).
34. Income tax expense
|34. Income tax expense EURm||2015/16||2014/15|
|Current income tax income and expense||–3.5||–4.4|
|thereof Austrian companies||–15.0||–18.8|
|thereof foreign companies||11.4||14.4|
|Deferred tax income and expense||19.6||21.7|
|thereof Austrian companies||8.6||8.2|
|thereof foreign companies||11.0||13.4|
The following table explains the reasons for the difference between the Austrian corporate income tax rate of 25.0% that applied in 2016 (previous year: 25.0%) and the tax income based on the Group net result reported on the consolidated statement of operations for the 2015/16 financial year:
|34. Calculation of the effective tax rate||2015/16|
|Result before income tax||198.9||207.9|
|Income tax rate/income tax expense at nominal tax rate||25.0||49.7||25.0||52.0|
|– Different corporate income tax rates in other countries||–1.5||–3.1||–4.0||–8.3|
|– Tax-free income from investments||–6.5||–12.9||–12.1||–25.1|
|+ Revaluation of deferred taxes||1.8||3.6||2.9||6.0|
|– Tax share valuations and impairment on Group receivables||–11.8||–23.5||–5.1||–10.6|
|+ Non-deductible expenses||1.0||2.0||1.4||2.9|
|– Other tax free income||–0.5||–0.9||–0.2||–0.4|
|+ Aperiodic tax increases||0.7||1.4||0.2||0.4|
|–/+ Other items||–0.2||–0.3||0.1||0.3|
|Effective tax rate/effective income tax expense||8.1||16.0||8.3||17.3|
The valuation of investments according to tax law are related primarily to the impairment losses recognised on the investments in EVN Nk BuB, EVN UBS, OOO EVN Umwelt Service, Shkodra, TEZ Plovdiv (previous year: EVN Kavarna and EVN Nk BuB) and the investment revaluation in EVN Bulgaria EC.
EVN’s effective tax rate for the reporting year equalled 8.1% of result before income tax (previous year: 8.3%). The effective tax rate represents the weighted average of the effective local corporate tax rates of all consolidated subsidiaries (see note 52. Deferred taxes).
35. Earnings per share
Earnings per share were calculated by dividing Group net result (= proportional share of result attributable to EVN AG shareholders) by the weighted average number of ordinary shares outstanding in 2015/16, i.e. 177,763,333 (previous year: 177,871,236). This amount may be diluted by so-called potential shares arising from stock options or convertible bonds. Since EVN did not have any such shares, there is no difference between basic and diluted earnings per share. Based on Group net result of EUR 156.4m for the 2015/16 financial year (previous year: EUR 148.1m), earnings per share equalled EUR 0.88 (previous year: EUR 0.83).