27 Provisions

Provisions for onerous contracts

The decision on whether there is a threat of loss on a long-term sales or procurement contract and the resulting recognition of a provision essentially depends on the situation regarding the relevant contractual prices and expected procurement or sales prices.

Provisions for onerous contracts for energy, certificates of origin and transport capacity totalling CHF 4,737 thousand were adjusted via energy procurement and recognised as income (prior year: CHF 23,901 thousand recognised as expense). In 2021, income of CHF 5,026 thousand (prior year: expense of CHF 20,779 thousand) falls to the Market Switzerland segment and expense of CHF 289 thousand (prior year: expense of CHF 3,122 thousand) to the Market Italy segment.

The provisions were calculated on the basis of risk-adjusted interest rates of between 8.8 and 15.0 per cent (prior year: 6.8 and 14.2 per cent).

Severance pay

When an employment relationship is terminated in Italy, the employee is entitled to severance pay corresponding to almost one month’s pay for each year of employment (see Note 34).

Dismantling provisions

The dismantling provisions category comprises various provisions for the dismantling of operating installations. Taken individually they are immaterial. Additions in 2021 were recognised under tangible assets.

Other provisions

In 2021 provisions of CHF 2,812 thousand for excise taxes were recognised in the Market Italy segment. Other provisions still include severance pay paid to sales agents in Italy amounting to CHF 1,501 thousand (prior year: CHF 1,348 thousand).