10 – Financial Result

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Financial result (Million €)

 

2018

2017

Dividends and similar income

 

22

19

Income from the disposal of shareholdings

 

13

4

Income from profit transfer agreements

 

1

3

Income from tax allocation to shareholdings

 

–

1

Income from other shareholdings

 

36

27

Expenses from loss transfer agreements

 

(54)

(40)

Write-downs on/losses from the sale of shareholdings

 

(24)

(17)

Expenses from other shareholdings

 

(78)

(57)

Net income from shareholdings

 

(42)

(30)

 

 

 

 

Interest income from cash and cash equivalents

 

160

165

Interest and dividend income from securities and loans

 

14

12

Interest income

 

174

177

Interest expenses

 

(540)

(492)

Interest result

 

(366)

(315)

 

 

 

 

Net interest income from overfunded pension plans and similar obligations

 

2

2

Income from the capitalization of borrowing costs

 

30

37

Miscellaneous financial income

 

–

–

Other financial income

 

32

39

Write-downs on/losses from securities and loans

 

(22)

(1)

Net interest expense from underfunded pension plans and similar obligations

 

(133)

(169)

Net interest expense from other long-term personnel obligations

 

–

(1)

Unwinding the discount on other noncurrent liabilities

 

(5)

(9)

Miscellaneous financial expenses

 

(209)

(219)

Other financial expenses

 

(369)

(399)

Other financial result

 

(337)

(360)

 

 

 

 

Financial result

 

(745)

(705)

Net income from shareholdings decreased from minus €30 million to minus €42 million due primarily to higher expenses from loss transfer agreements. One factor was that BASF Digital Farming GmbH was included for the first time in 2018.

The interest result fell by €51 million year on year, from minus €315 million to minus €366 million, as a result of higher interest expenses. The increase in interest expenses was mainly due to the higher financial debt, particularly commercial papers.

In comparison with 2017, income from the capitalization of borrowing costs declined due to the startup of major investment projects in the United States.

Write-downs/losses from securities and loans increased due to higher valuation allowances on loans and to losses from fair value measurement of securities.

The net interest expense from underfunded pension plans and similar obligations decreased in comparison with the previous year as a result of the reduced net defined benefit liability as of December 31, 2017. The net interest expense for the respective fiscal year is based on the discount rate and the defined benefit obligation at the beginning of the year.

The decline in other financial expenses was primarily attributable to interest on income taxes.