Boskalis_Annual Report_2017

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10. IMPAIRMENT LOSSES In 2016 the Group incurred a non-cash impairment loss of EUR 842,6 million of which EUR 382,3 million related to goodwill (see note 15), EUR 366,2 million to property, plant and equipment (see note 16) and EUR 94,2 million to impairment losses in joint ventures, mainly Smit Lamnalco (see note 17). This impairment charge related almost entirely to the services part of the Group’s offshore oil and gas activities. In some of the service-related offshore energy market segments there was and still is a structural imbalance between supply and demand, particularly in the heavy marine transport segment. This puts utilization, rates and margins under pressure. In 2017 no material impairment losses were recognized.

11. FINANCE INCOME AND EXPENSES

2017

2016

433 433

Interest income on short-term bank deposits

1,001 1,001

Finance income

- 11,424

Interest expenses

- 30,014 - 40,264

- -

Expenses prepayment US private placements

Change in fair value of (hedging instruments regarding) borrowings

- 178

- 1,934 - 13,358

Other expenses Finance expenses

- 1,860 - 72,316

- 12,925

Net finance expenses recognized in consolidated statement of profit or loss

- 71,315

Expenses prepayment US private placements in 2016 relates to the early repayment of the 2010 private placements (see note 24) and consisted of make-whole payments of EUR 30.0 million due to noteholders, EUR 9.9 million of expenses relating to the unwinding of the related cross-currency interest rate swaps and the impairment of capitalized transaction costs incorporated in the carrying amount for early repayment of financing of EUR 0.4 million. Following the early repayment the related cross-currency interest rate swaps no longer qualified for hedge accounting. Amortization relating to other interest-bearing borrowings amounts to EUR 0.5 million (2016: EUR 0.7 million) and commitment fees paid to EUR 1.1 million (2016: EUR 1.0 million). There are no fair value adjustments for interest-bearing borrowings (with regard to hedging instruments) in 2017. In 2016 an adjustment of EUR 9.9 million was made for a negative effect on foreign currency translation on interest-bearing borrowings and other financing obligations, as well as an equal but opposite amount for foreign currency translations on the related derivatives.

ANNUAL REPORT 2017 – BOSKALIS A L REP RT 2017 -- BOSKALIS