8 – Net Income from Shareholdings and Financial Result
|
H1 |
|
|---|---|---|
|
2022 |
2021 |
Income from non-integral companies accounted for using the equity method |
–342 |
73 |
Dividends and similar income |
15 |
11 |
Income from the disposal of shareholdings |
1 |
– |
Income from other shareholdings |
16 |
11 |
Expenses from loss transfer agreements |
–34 |
–29 |
Write-downs on/losses from the sale of shareholdings |
–4 |
–31 |
Expenses from other shareholdings |
–38 |
–60 |
Net income from shareholdings |
–364 |
24 |
Net income from shareholdings declined from €24 million in the first half of 2021 to –€364 million in the first half of 2022, mainly due to lower earnings at Wintershall Dea AG, Kassel/Hamburg, Germany.
Due to Russia’s war of aggression against Ukraine, Wintershall Dea tested its assets in Russia and the midstream business for impairment in the first quarter of 2022. This led to impairments of €545 million on equity-accounted investments held by Wintershall Dea (BASF’s share: €373 million after taxes).
As BASF had recognized fair value adjustments for assets in Russia as part of the initial measurement of Wintershall Dea in 2019, a scenario-based impairment test was used to assess the recoverability of these assets as of June 30, 2022. This did not lead to any additional impairments.
The scenarios range from an optimistic case that assumes that the contractual, technical and physical potential of the assets can be realized to a worst-case scenario that assumes expropriation, the impact of which would be partly compensated for by existing investment guarantees from the German federal government. The operating assumptions and discount rates remained largely unchanged compared with the impairment test as of December 31, 2021. Cash flows were adjusted for gas and oil price assumptions and the latest developments of the RUB/EUR exchange rate. The price assumptions in the optimistic case reflect Wintershall Dea’s contractual agreements in Russia and take into account the most recent price developments for the years 2022–2025 compared with the impairment test from December 2021. Another scenario assumes that Russian gas is only marketed domestically and that Wintershall Dea can therefore only realize lower prices, although existing contractual arrangements do not provide for this.
The results of the various scenarios were weighted with probabilities that reflect BASF management’s current assessment. However, the current situation continues to be dominated by extreme uncertainty. Future developments may have a significant and adverse effect on the performance of the assets and may lead to further impairments.
Due to the appreciation of the ruble in the second quarter of 2022, Wintershall Dea’s Russian assets accounted for €5.4 billion of the total carrying amount of Wintershall Dea (€10.6 billion).
|
H1 |
|
|---|---|---|
|
2022 |
2021 |
Interest income from cash and cash equivalents |
82 |
76 |
Interest and dividend income from securities and loans |
6 |
3 |
Interest income |
89 |
79 |
Interest expenses |
–266 |
–236 |
Interest result |
–177 |
–157 |
Reversals of write-downs on/income from securities and loans |
3 |
10 |
Net interest income from overfunded pension plans and similar obligations |
2 |
– |
Income from the capitalization of borrowing costs |
18 |
13 |
Interest income on income taxes |
8 |
4 |
Miscellaneous financial income |
3 |
– |
Other financial income |
33 |
27 |
Write-downs on/losses from securities and loans |
–16 |
–2 |
Net interest expense from underfunded pension plans and similar obligations |
–38 |
–40 |
Net interest expense from other long-term personnel obligations |
– |
– |
Unwinding the discount on other noncurrent liabilities |
–3 |
–4 |
Interest expenses on income taxes |
–1 |
–1 |
Miscellaneous financial expenses |
–31 |
–38 |
Other financial expenses |
–90 |
–85 |
Other financial result |
–57 |
–58 |
|
|
|
Financial result |
–234 |
–215 |