Consolidated Financial Statements of the Repower Group

Notes to the consolidated financial statements: notes

1 Net sales from goods and services

 

2017

2016

CHF thousand

 

 

 

 

 

Net sales from goods and services

1,835,469

1,699,776

Revenue from energy business

1,809,322

1,672,262

Revenues from services and other usual business activities

26,147

27,514

Revenue from energy business and revenues from services and other usual business activities are recognised in the income statement when delivery of goods or services has been performed. Sales of products and related services are broken down into their material performance obligations, measured, and realised on the date they are performed.

A breakdown of net revenues by Repower business segment is presented in the note on segment reporting (Note 38).

2 Own costs capitalised

 

2017

2016

CHF thousand

 

 

 

 

 

Own costs capitalised

6,014

7,971

Own costs capitalised essentially comprise investments in Repower’s generation and grid assets.

3 Change in inventory of sales orders

 

2017

2016

CHF thousand

 

 

 

 

 

Change in inventory of sales orders

–707

496

The change in inventory of sales orders relates to as yet uncompleted work for third parties.

4 Other operating income

 

2017

2016

CHF thousand

 

 

 

 

 

Other operating income

5,963

15,316

Profit from sale of group companies

2,727

Profit from disposal of tangible assets

2,860

11,178

Revenue from other operating activities

3,103

1,411

The profit from the sale of group companies in the 2016 financial year relates to the disposals of connecta ag, amounting to TCHF 1,066 (in the Market Switzerland segment), and Repower Furnizare România S.r.l., amounting to TCHF 1,661 (in other segments and activities).

The profit from the disposal of tangible assets in the current and prior year relate in particular to income from the sale of properties in other segments and activities.

5 share of earnings from associates and joint ventures

 

2017

2016

CHF thousand

 

 

 

 

 

Share of earnings from associates and joint ventures

–3,406

–3,284

Associated organisations

–3,418

–3,270

Joint ventures

12

–14

The development of interests in associates and joint ventures is shown in Note 17.

6 Energy procurement

 

2017

2016

CHF thousand

 

 

 

 

 

Energy procurement

–1,600,944

–1,478,049

Procurement of electricity, gas and certificates

–1,598,664

–1,466,640

Other energy expenses

–2,280

–11,409

The other energy expenses item essentially comprises broker fees.

7 Concession fees

 

2017

2016

CHF thousand

 

 

 

 

 

Concession fees

–17,831

–16,293

Water rates/hydro plant taxes

–9,608

–8,749

Other concession fees

–8,223

–7,544

8 Personnel expenses

 

2017

2016

CHF thousand

 

 

 

 

 

Personnel expenses

–67,977

–69,700

Wages and salaries

–53,581

–54,837

Social security costs and other personnel costs

–14,396

–14,863

9 Materials and third party services

 

2017

2016

CHF thousand

 

 

 

 

 

Materials and third party services

–30,847

–27,965

Materials

–8,283

–7,601

Third party services

–22,564

–20,364

The materials and third party services item contains expenses for maintaining and operating technical assets, external services for operational processes and the performance of services by third parties.

10 Other operating expenses

 

2017

2016

CHF thousand

 

 

 

 

 

Other operating expenses

–46,573

–75,956

Cost of premises

–3,701

–3,909

Vehicle and transport costs

–2,284

–2,436

Administrative costs

–7,835

–8,370

IT costs

–8,280

–7,625

Marketing & communications

–7,078

–7,692

Allowances for doubtful accounts

–7,213

–32,863

Capital taxes, levies and fees

–3,842

–5,923

Other operating expenses

–6,340

–7,138

Information on the development of allowances for doubtful accounts can be found in Note 21.

11 Depreciation and value adjustments of tangible assets

 

2017

2016

CHF thousand

 

 

 

 

 

Depreciation and value adjustments of tangible assets

–41,724

–26,338

Depreciation of tangible assets

–41,724

–41,844

Reversal of impairments of tangible assets

15,506

Reversals of impairments of generations assets are explained by segment:

Market Switzerland segment

In 2016 THCF 2,834 in reversals of impairments of intangible assets was recognised for the Taschinas plant. This is due to a fall in the cost of capital (WACC) prompted by the interest rate environment and a reduction in maintenance and operating expenditure in line with the market situation.

Market Italy segment

A reversal of TCHF 12,672 in the 2016 financial year relates to the Teverola combined-cycle gas turbine plant. The reversal for the plant was prompted by a substantial improvement in revenues from ancillary services. The generation asset is valued on the basis of its value in use calculated on a discounted cash flow basis.

12 Depreciation and value adjustments of intangible assets

 

2017

2016

CHF thousand

 

 

 

 

 

Amortisation and value adjustments of intangible assets

–3,658

–3,856

Amortisation of intangible assets

–3,658

–3,286

Impairment of intangible assets

–570

13 Net financial income

 

2017

2016

CHF thousand

 

 

 

 

 

 

 

 

Financial income

21,431

4,043

Interest income

928

1,227

Dividend income

288

205

Other financial income

90

539

Changes in the value of securities held for trading

1,450

2,072

Currency translation

18,675

 

 

 

Financial expenses

–35,574

–31,855

Interest expense

–10,287

–17,741

Interest accumulated on provisions

–1,146

–760

Changes in securities held for trading

–18,370

–940

Currency translation

–2,056

Impairments

–4

Loss on premature repayment of liabilities

–1,468

–5,131

Other financial expenses

–4,303

–5,223

 

 

 

Net financial result

–14,143

–27,812

In 2017 the losses on premature repayment of liabilities relate to the premature closing of an off-balance-sheet interest rate swap held until that point for hedging purposes; in 2016 the losses related to the premature repayment of registered bonds.

The changes in the value of securities held for trading relate to interest rate swaps and forward exchange transactions to hedge currency and interest rate risks.

14 Income taxes

 

2017

2016

CHF thousand

 

 

 

 

 

Income taxes referred to in the income statement

363

4,673

Current income taxes

335

–2,061

Deferred income taxes

28

6,734

The reconciliation between the actual tax burden and the expected tax burden for the financial years ending on 31 December 2017 and 2016 is as follows:

 

2017

2016

CHF thousand

 

 

 

 

 

Reconciliation

 

 

Income before taxes

19,636

–5,694

Income tax rate for parent company

16.1%

16.7%

 

 

 

Income taxes at expected income tax rate

–3,165

950

Tax effect from income taxed at other tax rates

–1,878

–2,705

Tax effect from tax-free income/non-tax-deductible expenses

493

4,385

Tax losses in the current year for which no deferred tax assets were recognised

–8,434

–1,289

Tax loss carryforwards for which no deferred tax assets were recognised

4,018

2,974

Regional production tax in Italy – IRAP

–1,559

–995

Change in tax rate

908

Re-evaluation of deferred tax on intercompany receivables

9,728

Income taxes for previous years

–290

725

Non-usable withholding tax 1)

1,173

–1,276

Other

277

996

Income taxes referred to in the income statement

363

4,673

 

 

 

Effective income tax rate

1.8%

–82.1%

1) In 2017 this item includes a refund from the flat tax payment for the years 2013 and 2014. This amount was recorded as current income tax.

Unrecognised tax loss carryforwards

On the balance sheet date there were unrecognised tax loss carryforwards of TCHF 174,317 (prior year: TCHF 203,114).

This results in unrecognised deferred tax assets of TCHF 37,770 (prior year: TCHF 40,154). Given the uncertainty involved in offsetting loss carryforwards against future earnings, deferred taxes are not capitalised (Swiss GAAP FER 11/23).

15 Tangible assets

 

Power plants

Grids

Assets under construction

Land and buildings

Other

Total

CHF thousand

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross values at 1 January 2016

877,483

757,328

100,833

98,591

48,514

1,882,749

Own costs capitalised

293

7,678

7,971

Additions

5

526

15,034

185

1,227

16,977

Disposals

–4,540

–5,657

–288

–22,299

–2,094

–34,878

Disposals from changes in consolidation

–14,154

–19,470

–467

–34,091

Reclassifications between asset classes

4,104

11,263

–16,500

1,133

Effect of currency translation

–3,371

–228

–155

–164

–3,918

Gross values at 31 December 2016

873,681

749,599

87,059

76,322

48,149

1,834,810

 

 

 

 

 

 

 

Accumulated depreciation and value adjustments at 1 January 2016

–518,981

–423,015

–88,716

–50,692

–27,536

–1,108,940

Depreciation

–19,829

–17,687

–866

–3,462

–41,844

Reversal of impairments

15,506

15,506

Disposals

4,540

5,167

16,635

1,916

28,258

Disposals from changes in consolidation

10,120

19,433

275

29,828

Effect of currency translation

1,958

216

128

83

2,385

Accumulated depreciation and value adjustments at 31 December 2016

–516,806

–425,415

–69,067

–34,795

–28,724

–1,074,807

Net values at 31 December 2016

356,875

324,184

17,992

41,527

19,425

760,003

of which security pledged for debts

 

 

 

 

 

2,513

 

 

 

 

 

 

 

Gross values at 1 January 2017

873,681

749,599

87,059

76,322

48,149

1,834,810

Own costs capitalised

241

5,773

6,014

Additions

179

13,630

184

3,759

17,752

Disposals

–10,734

–4,328

–9,428

–4,490

–1,438

–30,418

Reclassifications between asset classes

3,525

12,980

–16,686

–1,182

1,363

Effect of currency translation

33,910

516

1,459

1,732

37,617

Gross values at 31 December 2017

900,382

758,671

80,864

72,293

53,565

1,865,775

 

 

 

 

 

 

 

Accumulated depreciation and value adjustments at 1 January 2017

–516,806

–425,415

–69,067

–34,795

–28,724

–1,074,807

Depreciation

–19,925

–17,447

–667

–3,685

–41,724

Disposals

10,734

3,683

3,111

1,259

18,787

Effect of currency translation

–20,334

–418

–1,276

–837

–22,865

Accumulated depreciation and value adjustments at 31 December 2017

–546,331

–439,179

–69,485

–33,627

–31,987

–1,120,609

Net values at 31 December 2017

354,051

319,492

11,379

38,666

21,578

745,166

of which security pledged for debts

 

 

 

 

 

2,458

Land and buildings connected with power generation and grid facilities are stated under power plants and grids.

Information on reversals of impairments in 2016 can be found in Note 11.

Leased tangible assets

The net carrying amount of the motor vehicles held as part of the finance leasing agreement totalled TCHF 64 (previous year: TCHF 80) at the closing date.

Total lease liabilities come to TCHF 53 (prior year: TCHF 74).

16 Intangible assets

 

Software

Concessions and rights of use

Other

Total

CHF thousand

 

 

 

 

 

 

 

 

 

Gross values at 1 January 2016

24,828

15,969

1,125

41,922

Additions

2,392

1,099

231

3,722

Disposals

–1,606

–49

–1,655

Disposals from changes in consolidation

–139

–287

–426

Reclassifications between asset classes

59

–59

Effect of currency translation

–68

–9

–6

–83

Gross values at 31 December 2016

25,466

17,059

955

43,480

 

 

 

 

 

Accumulated amortisation and value adjustments at 1 January 2016

–18,800

–11,258

–226

–30,284

Amortisation

–2,850

–391

–45

–3,286

Impairments

–570

–570

Disposals

1,601

49

1,650

Disposals from changes in consolidation

24

19

43

Reclassifications between asset classes

–73

73

Effect of currency translation

45

1

46

Accumulated amortisation and value adjustments at 31 December 2016

–20,053

–12,219

–129

–32,401

Net values at 31 December 2016

5,413

4,840

826

11,079

 

 

 

 

 

Gross values at 1 January 2017

25,466

17,059

955

43,480

Additions

2,313

788

3,101

Disposals

–2,182

–2,182

Reclassifications between asset classes

234

–234

Effect of currency translation

648

87

77

812

Gross values at 31 December 2017

26,479

17,146

1,586

45,211

 

 

 

 

 

Accumulated amortisation and value adjustments at 1 January 2017

–20,053

–12,219

–129

–32,401

Amortisation

–3,275

–348

–35

–3,658

Disposals

1,906

1,906

Effect of currency translation

–457

–13

–470

Accumulated amortisation and value adjustments at 31 December 2017

–21,879

–12,567

–177

–34,623

Net values at 31 December 2017

4,600

4,579

1,409

10,588

17 Investments in associates and joint ventures

 

2017

2016

CHF thousand

 

 

 

 

 

Investments in associates and joint ventures

3,632

3,162

EL.IT.E S.p.A.

3,508

3,050

Aerochetto S.r.l.

Swisscom Energy Solutions AG

Grischelectra AG

28

27

Kraftwerk Morteratsch AG

96

85

 

 

 

 

 

 

Carrying amounts at 1 January

3,162

6,885

Investments

100

Reclassification of active loans

Disposals

–3,779

Dividends

–49

Effect of currency translation

285

–29

Share of earnings

185

34

Impairments

Carrying amounts at 31 December

3,632

3,162

 

 

 

 

 

 

Decrease in loans receivable

 

 

01.01.2018

–11,926

–9,473

Share of earnings

–3,591

–3,318

Reclassification of loans receivable into equity

523

814

Effect of currency translation

–536

51

31 December

–15,530

–11,926

Part of the net investments in associates Swisscom Energy Solutions AG and Aerochetto S.r.l. are loans extended to these entities recognised under financial assets. Losses of TCHF 15,530 in excess of the carrying value of the investments (prior year: TCHF 11,926) were netted with the loans (Note 18).

Prior-year disposals amounting to TCHF 3,779 related to the sale of the interest in Rhiienergie AG. This resulted in income of TCHF 98, which is recognised under other financial income (Note 13). The transaction resulted in a cash inflow of CHF 3,877.

In 2016, together with Reichmuth Infrastruktur Schweiz KGK, Repower established the joint venture company Kraftwerk Morteratsch AG. The establishment of the company in cash entailed investment of TCHF 100 on Repower’s part.

18 Financial assets

 

31.12.2017

31.12.2016

CHF thousand

 

 

 

 

 

Financial assets

62,783

20,796

AKEB Aktiengesellschaft für Kernenergiebeteiligungen

6,500

6,500

Kraftwerke Hinterrhein AG

6,300

6,300

Loans receivable

6,516

4,516

Non-current securities

3,387

3,388

Employer contribution reserves

80

92

Fixed term deposits

40,000

Repower holds interests of 7.0 per cent and 6.5 per cent respectively in the partner plants AKEB Aktiengesellschaft für Kernenergie-Beteiligungen, Lucerne, and Kraftwerke Hinterrhein AG, Thusis. These investments are carried at acquisition cost.

The active loans relate to loans to associates and joint ventures. Accumulated impairments of TCHF 15,530 (prior year: TCHF 11,926) were recognised under this item (see Note 17).

Information on the development of the employer contribution reserve account can be found in Note 35.

19 Deferred tax assets

 

2017

2016

CHF thousand

 

 

 

 

 

Deferred tax assets

34,141

42,811

The tax rates used to calculate deferred income tax items are 16.1 per cent for Switzerland, 24.0 per cent for Italy, and between 27.9 and 32.8 per cent for Germany.

20 Inventories

 

31.12.2017

31.12.2016

CHF thousand

 

 

 

 

 

Inventories

24,745

16,343

Emission certificates

8,660

4,147

Gas

7,142

2,588

Work in progress

3,245

3,952

Inventories of materials

5,698

5,656

Work in progress relates to services provided by Repower to third parties and not yet billed. In the 2017 financial year no impairment loss was recognised on inventories (prior year: TCHF 98), and TCHF 36 (prior year: TCHF 0) in impairment losses was reversed.

21 Trade accounts Receivable

 

31.12.2017

31.12.2016

CHF thousand

 

 

 

 

 

Trade accounts receivable

382,940

313,852

Trade accounts receivable

392,539

357,659

Allowances for doubtful accounts

–9,599

–43,807

 

 

 

Development of allowances for doubtful accounts

 

 

 

 

 

Carrying amount at 1 January

43,807

31,014

Additions

9,515

23,640

Utilisations

–44,110

–8,319

Reversals

–3,527

–2,272

Effect of currency translation

3,914

–256

End balance at 31 December

9,599

43,807

In 2017 impaired receivables were sold to a factoring company. This transaction resulted in a loss of TCHF 586 recognised under other operating expense in the Market Italy segment.

The stated trade accounts receivable also include claims on associates and joint ventures amounting to TCHF 7,081 (prior year: TCHF 4,431).

Trade accounts receivable are measured by applying individual and lump-sum adjustments to the non-impaired positions based on their maturity structure and historical experience.

22 Other receivables

 

31.12.2017

31.12.2016

CHF thousand

 

 

 

 

 

Other receivables

32,513

47,194

Current income tax receivables

6,290

7,870

VAT receivables

7,646

10,319

Advance payments for inventories

2,418

9,859

Security deposits paid

6,280

4,041

Other receivables

9,879

15,105

23 Prepaid expenses and accrued income

 

31.12.2017

31.12.2016

CHF thousand

 

 

 

 

 

Prepaid expenses and accrued income

2,876

2,161

24 Securities

 

31.12.2017

31.12.2016

CHF thousand

 

 

 

 

 

Securities

20,530

17,285

Fixed term deposits (4-12 months)

20,000

15,000

Positive replacement values

414

2,160

Other securities

116

125

The positive replacement values are related to forward exchange transactions.

25 Replacement values of held-for-trading positions

 

31.12.2017

31.12.2016

CHF thousand

 

 

 

 

 

Positive replacement values

108,028

147,772

 

 

 

Negative replacement values

107,153

141,941

26 Cash and cash equivalents

 

31.12.2017

31.12.2016

CHF thousand

 

 

 

 

 

Cash and cash equivalents

394,479

318,171

Sight deposits

259,373

220,871

Cash invested for less than 90 days

135,106

97,300

At the balance sheet date, Repower also had the following unused bank credit lines:

 

31.12.2017

31.12.2016

CHF thousand

 

 

 

 

 

Credit lines

207,442

164,788

Unused general credit lines

16,681

7,594

Additional unused credit lines for the purpose of issuing guarantees

190,761

157,194

27 Provisions

 

Litigation and court proceedings

Dismantling provisions

Provisions for onerous contracts

Severance pay

Other provisions

Total

CHF thousand

 

 

 

 

 

 

 

 

 

 

 

 

 

Carrying value at 1 January 2016

1,132

2,428

9,164

3,053

6,941

22,718

Additions

959

5,531

406

368

7,264

Utilisations

–314

–177

–4,607

–5,098

Reversals

–4,846

–562

–5,408

Interest

28

732

760

Disposals from changes in consolidation

–63

–63

Effect of currency translation

–17

–16

–30

–10

–73

Carrying value at 31 December 2016

1,697

2,440

10,581

3,252

2,130

20,100

 

 

 

 

 

 

 

Carrying value at 1 January 2017

1,697

2,440

10,581

3,252

2,130

20,100

Additions

277

555

474

1,306

Utilisations

–423

–414

–96

–933

Reversals

–578

–1,719

–299

–2,596

Interest

30

1,116

1,146

Effect of currency translation

100

179

299

195

773

Carrying value at 31 December 2017

796

2,926

9,978

3,692

2,404

19,796

 

 

 

 

 

 

 

Non-current Provisions

 

 

 

 

 

 

Carrying value at 31 December 2016

1,697

2,440

10,581

3,252

2,110

20,080

Carrying value at 31 December 2017

796

2,926

9,978

3,692

2,145

19,537

 

 

 

 

 

 

 

Current provisions

 

 

 

 

 

 

Carrying value at 31 December 2016

20

20

Carrying value at 31 December 2017

259

259

Provisions for onerous contracts

Provisions were recognised for onerous energy procurement contracts. The reversal in the amount of TCHF 1,719 (previous year: TCHF 4,846) was recognised under energy procurement in the Market Switzerland segment. The provision was calculated on the basis of a risk-adjusted interest rate of 11.15 per cent (prior year: 10.37 per cent).

Severance pay

When an employment relationship is terminated in Italy, the employee is entitled to severance pay corresponding to around one month’s pay for each year of employment (see Note 35).

Dismantling provisions

The dismantling provisions category comprises various provisions for the dismantling of operating installations. Taken individually they are immaterial.

28 Deferred tax liabilities

 

2017

2016

CHF thousand

 

 

 

 

 

Deferred tax liabilities

21,368

33,056

The tax rates used to calculate deferred income tax items are 16.1 per cent for Switzerland, 24.0 per cent for Italy, and between 27.9 and 32.8 per cent for Germany.

29 Non-current financial liabilities

 

 

 

 

31.12.2017

31.12.2016

CHF thousand

 

 

 

 

 

 

 

 

 

 

 

 

Currency

Due date

Nominal interest rate

 

 

Non-current financial liabilities

 

 

 

378,452

301,007

 

 

 

 

 

 

Loans

 

 

 

139,450

115,000

Private placement

CHF

28.03.2018

3.660%

25,000

Private placement

CHF

20.03.2023

3.625%

10,000

10,000

Private placement

CHF

28.06.2030

2.500%

20,000

20,000

Bank loan

CHF

11.12.2020

3.100%

10,000

Promissory note (SSD)

EUR

23.01.2024

1.698%

29,255

Promissory note (SSD)

EUR

23.01.2025

1.922%

29,255

Bank loan

CHF

04.07.2026

1.820%

50,000

50,000

Bank loan

CHF

31.03.2020

1.160%

940

 

 

 

 

 

 

Bonds

 

 

 

114,144

113,893

Bond par value

CHF

20.07.2022

2.375%

115,000

115,000

Net expenditures

CHF

 

 

–856

–1,107

 

 

 

 

 

 

Registered bond

 

 

 

2,809

2,568

Registered bond

EUR

08.08.2034

3.400%

2,926

2,685

Net expenditures

EUR

 

 

–117

–117

 

 

 

 

 

 

Other financial liabilities

 

 

 

122,049

69,546

Investment loan 1)

CHF

31.12.2020

no interest

425

638

Loan (minorities) 2)

CHF

31.12.2070

no interest

20,281

18,139

Loan (minorities) 2)

CHF

31.12.2085

0.250%

56,951

Interest rate swap

CHF

28.06.2024

 

4,529

Interest rate swap

CHF

01.07.2031

 

5,764

6,392

Interest rate swap

CHF

18.11.2031

 

6,587

7,409

Other financial liability

EUR

31.12.2021

no interest

401

551

Loan (minorities)

EUR

30.06.2027

3.900%

31,608

31,835

Liabilities for finance leasing

CHF

 

2.500%

32

53

 

 

 

 

 

 

Financial liabilities are carried in the following currencies:

 

 

 

 

 

Swiss francs

 

 

 

285,123

266,053

Euro (translated)

 

 

 

93,329

34,954

1) Mortgage assignments were pledged as security for the investment loan of TCHF 425 (previous year: TCHF 638). The fixed assets pledged in this connection are disclosed in Note 15.

2) Loan from minority shareholders in Repartner Produktions AG to participate in the production of selected hydroelectric power plants in Canton Graubünden.

A bank loan originally due on 11 December 2020 and an interest rate swap maturing on 28 June 2024 were paid off prematurely.

30 Other non-current liabilities

 

2017

2016

CHF thousand

 

 

 

 

 

Other non-current liabilities

63,081

62,001

Connection fees and grid cost contributions

62,982

62,001

Other

99

This item comprises accrued connection fees and grid cost contributions received from customers, which are charged to profit or loss over a period of 35 years via net sales from goods and services in the Market Switzerland segment.

31 Current financial liabilities

 

31.12.2017

31.12.2016

CHF thousand

 

 

 

 

 

Current financial liabilities

40,151

20,090

Bonds and loans

30,388

19,761

Negative replacement values

9,742

308

Liabilities for finance leasing

21

21

The replacement values are related to forward exchange transactions.

The prior year’s current financial liabilities include a bank loan of TCHF 1,090 due on 31 March 2017. Mortgage assignments were pledged as security for this bank loan. The fixed assets pledged in this connection are disclosed in Note 15.

32 Trade accounts payable

 

31.12.2017

31.12.2016

CHF thousand

 

 

 

 

 

Trade accounts payable

380,401

346,003

The stated trade accounts payable also include liabilities vis-à-vis associates and joint ventures amounting to TCHF 889 (prior year: TCHF 4,720).

33 Other current liabilities

 

31.12.2017

31.12.2016

CHF thousand

 

 

 

 

 

Other current liabilities

26,102

21,733

Current income tax liabilities

501

1,470

VAT liabilities

3,262

1,505

Connection fees and grid cost contributions

3,529

3,551

Customer prepayments

785

3,763

Excise taxes

5,918

129

Other current liabilities

12,107

11,315

34 Deferred income and accrued expenses

 

31.12.2017

31.12.2016

CHF thousand

 

 

 

 

 

Deferred income and accrued expenses

16,461

17,763

 

 

 

Deferred income for capital and other taxes, charges and levies

5,158

5,130

Accrued interest

3,655

3,001

Accrued annual leave and overtime

5,700

6,454

Accrued other personnel expenses

1,667

1,590

Other accrued expenses

281

1,588

35 Pension schemes

Employer contribution reserves

 

Nominal value

Balance sheet

Additions/utilisations

Result of ECR in personnel expenses

 

31.12.2017

31.12.2017

31.12.2016

2017

2017

2016

CHF thousand

 

 

 

 

 

 

 

 

 

 

 

 

 

Pension institutions

80

80

92

–12

–12

–51

For reasons of materiality, employer contribution reserves are not discounted. The nominal value corresponds to the carrying value. Employer contribution reserves are recognised under non-current financial assets.

Economic benefit/economic liability and pension benefit expenses

 

Overfunding/ underfunding

Organisation’s share of economic liability

Change on prior year

Contributions concerning the business period

Pension benefit expenses within personnel expenses

 

31.12.2017

31.12.2017

31.12.2016

2017

2017

2017

2016

CHF thousand

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pension plans without overfunding/underfunding

3,417

3,417

3,710

Pension institutions with unfunded obligations

 

–3,692

–3,252

–440

599

740

677

Total

–3,692

–3,252

–440

4,016

4,157

4,387

The pension fund for employees of Repower AG is organised as a pension scheme of the collective foundation of the PKE Vorsorgestiftung Energie foundation. Swibi AG is affiliated to a joint pension scheme of the PKE Vorsorgestiftung Energie foundation. Based on the most recent financial statements available, neither of these pension schemes is under- or overfunded.

The item “Pension institutions without unfunded obligations” relates to the obligation to pay severance pay in Italy (see Note 27). The change in the stated provision in the income statement comes to THCF 141 at the average exchange rate.

36 Derivative financial instruments

 

Replacement values

Replacement values

 

positive

negative

positive

negative

 

31.12.2017

31.12.2016

CHF thousand

 

 

 

 

 

 

 

 

 

On-balance-sheet derivatives

 

 

 

 

 

 

 

 

 

Held for trading

 

 

 

 

Interest derivatives

12,351

18,330

Currency derivatives

414

9,742

2,160

308

Energy derivatives

373,370

372,495

383,261

377,430

Total on-balance-sheet derivatives

373,784

394,588

385,421

396,068

Netting

–265,342

–265,342

–235,489

–235,489

Net value on balance sheet

108,442

129,246

149,932

160,579

 

 

 

 

 

Off-balance-sheet derivatives

 

 

 

 

 

 

 

 

 

Held for cash flow hedges

 

 

 

 

Interest derivatives

1,406

Energy derivatives

38,419

63,655

148,105

161,483

Total off-balance-sheet derivatives

38,419

63,655

148,105

162,889

 

 

 

 

 

Total derivative financial instruments

146,861

192,901

298,037

323,468

The line “netting” refers to the netting of energy derivatives transactions entered into with the same counterparty and with whom there are enforceable netting agreements.

Cash flow hedges used as hedging transactions are not recognised on the balance sheet and therefore do not yet impact the balance sheet. Off-balance-sheet energy and interest derivatives are used to hedge future cash flows with a high probability of occurrence.

37 Transactions with related parties

The balances and liabilities reported on the balance sheet and the transactions contained in the income statement vis-à-vis related parties are related to business with the main shareholders and Repower entities, associates, partner works and joint ventures controlled by them.

The following balance sheet and profit and loss items contain the following amounts vis-à-vis related third parties:

 

31.12.2017

31.12.2016

CHF thousand

 

 

 

 

 

Income statement item

 

 

Net Sales from goods and services

88,383

28,968

Energy procurement

–35,047

–42,787

Financial and other operating income

402

562

Financial and other operating expenses

–200

–324

 

 

 

Balance sheet item

 

 

 

 

 

Assets

 

 

Financial assets

7,516

5,516

Trade accounts receivable

17,177

10,990

Positive replacement values of held for trading positions

2,626

896

 

 

 

Liabilities

 

 

Non-current liabilities

99

Trade accounts payable

981

12,773

Negative replacement values of held for trading positions

13,954

15,125

 

 

 

Off-balance-sheet energy derivatives

 

 

 

 

 

Held for cash flow hedges

 

 

Positive replacement values

786

292

Negative replacement values

6,126

5,674

Transactions are at market prices, or in the case of Grischelectra AG at annual costs.

Canton Graubünden is deemed to be a related party in its capacity as a shareholder. Official business such as levying taxes, concession-related charges, fees, etc., is done on a statutory basis and is therefore not included here. Canton Graubünden’s energy business is transacted via Grischelectra AG, which is included as a related party in the table above.

In 2017 Repower sold 6 per cent of its interest in Repartner Produktions AG to the related party Elektrizitätswerke des Kantons Zürich (EKZ). The net cash inflows for the sale of the interests and the shareholder’s loans granted to date by Repower come to TCHF 5,721 and THCF 9,779 respectively. The disposal was made at carrying values. The sale of minority interests in Repartner Produktions AG has resulted in a TCHF 5,721 increase in Repower’s consolidated equity.

In the financial year under review, Repower AG sold the Morteratsch power plant, which it built, to the joint venture Kraftwerk Morteratsch AG at a carrying value of TCHF 9,055, realising a gain of TCHF 1,001.

Compensation paid to members of the board of directors and executive board is disclosed in the corporate governance section.

38 Segment reporting

Segment reporting is done by geographic market and reflects internal management and reporting structures. The information provided is that used by management for steering and assessing the business performance and development of the individual segments. For each business segment, internal steering, performance measurement and capital allocation are carried out on the basis of the segment’s earnings before interest and income taxes (EBIT). Segment income is calculated on the basis of the accounting and valuation principles used at group level.

 

Market Switzerland

Market Italy

Other segments and activities

Group

CHF thousand

 

 

 

 

 

 

 

 

 

2017

 

 

 

 

 

 

 

 

 

Net sales from goods and services

638,736

1,255,523

–58,790

1,835,469

Net sales from goods and services

620,640

1,214,675

154

1,835,469

Net sales from goods and services between segments

18,096

40,848

–58,944

 

 

 

 

 

Earnings before interest and taxes (EBIT)

16,066

24,271

–6,558

33,779

 

 

 

 

 

 

Market Switzerland

Market Italy

Other segments and activities

Group

CHF thousand

 

 

 

 

 

 

 

 

 

2016

 

 

 

 

 

 

 

 

 

Net sales from goods and services

577,457

1,121,597

722

1,699,776

Net sales from goods and services

517,781

1,083,661

98,334

1,699,776

Net sales from goods and services between segments

59,676

37,936

–97,612

 

 

 

 

 

Earnings before interest and taxes (EBIT)

13,121

10,697

–1,700

22,118

39 Treasury shares

 

2017

2016

 

Number of shares

Carrying amount in CHF

Number of shares

Carrying amount in CHF

 

 

 

 

 

Initial balance at 1 January

382

20,713

Purchases

2,637

152,507

3,442

167,750

Disposals

–2,763

–157,855

–3,060

–147,037

Ending balance at 31 December

256

15,365

382

20,713

Purchases/disposals of treasury shares relate to Repower AG registered shares. In the year under review Repower AG bought 2,637 shares (prior year 3,442) at CHF 57.83 (prior year CHF 48.74) and sold 2,763 shares (prior year 3,060) at an average price of CHF 59.38 (prior year CHF 50.48).

40 Off-balance-sheet business

In the course of regular business the group granted guarantees, bank guarantees and sureties in favour of third parties, directly and via commercial banks. These came to TCHF 179,744 (prior year: TCHF 177,225).

There is a service agreement for the Teverola power plant, concluded for 25 years and ending in June 2029. This resulted in an irrevocable payment obligation of TCHF 13,613 as per 31 December 2017 (prior year: TCHF 13,579).

In the course of usual business, litigation can arise which results in contingent liabilities. These contingent liabilities are not expected to result in material liabilities within Repower Group in addition to the provisions already made for litigation (Note 27). On the other hand there is litigation under way where Repower is asserting its rights, which, if it is successful, could resulting in inflowing payments.

 

31.12.2017

31.12.2016

CHF thousand

 

 

 

 

 

Off-balance-sheet liabilities

 

 

 

 

 

Operating lease (nominal value)

16,842

21,864

Due within 1 year

3,184

3,607

Due in 1-5 years

6,269

7,380

Due in more than 5 years

7,389

10,877

 

 

 

Procurement contracts

765,397

860,297

Due within 1 year

109,967

94,901

Due in 1-5 years

416,910

437,159

Due in more than 5 years

238,520

328,237

At the reporting date of the financial year under review, the outstanding minimum lease payments consisted of TCHF 15,640 for property and buildings (prior year: TCHF 20,300) and TCHF 1,202 for motor vehicles (prior year TCHF 1,474). There were no liabilities for IT hardware (prior year: TCHF 90).

Obligations to take delivery of electrical energy on the basis of the interests in AKEB Aktiengesellschaft für Kernenergie, Lucerne, Kraftwerke Hinterrhein AG, Thusis, and Grischelectra AG are not included in the above table. The volume and price of electricity delivered depend on actual future production and costs incurred by these associates and joint ventures.

Pledges are recognised under the relevant assets.

41 Events occurring after the balance sheet date

In January 2018 Repower successfully completed the early repurchase of a portion of its outstanding CHF 115,000 2.375 per cent bond maturing on 20 July 2022. Bonds with a total nominal value of CHF 18,555 were repurchased for CHF 19,807 and destroyed.

The group financial statements were approved for publication by the board of directors on 5 April 2018. They are subject to the approval of the annual general meeting, which will take place on 16 May 2018.