5.3.7Net Financing Costs
|
2016 |
2015 |
||
|---|---|---|---|
|
Interest income on loans & receivables |
14 |
23 |
|
|
Interest income on investments |
11 |
1 |
|
|
Interest income on Held-to-Maturity investments |
0 |
1 |
|
|
Net foreign exchange gain |
- |
- |
|
|
Other financial income |
1 |
0 |
|
|
Financial income |
26 |
25 |
|
|
Interest expenses on financial liabilities at amortised cost |
(181) |
(132) |
|
|
Interest expenses on hedging derivatives |
(95) |
(61) |
|
|
Interest addition to provisions |
(17) |
(2) |
|
|
Net loss on financial instruments at fair value through profit and loss |
(2) |
- |
|
|
Net cash flow hedges ineffectiveness |
(2) |
(5) |
|
|
Net foreign exchange loss |
(6) |
- |
|
|
Other financial expenses |
0 |
- |
|
|
Financial expenses |
(301) |
(200) |
|
|
Net financing costs |
(275) |
(175) |
The increase in interest expenses is primarily due to the interest costs related to the FPSOs Cidade de Marica, Cidade de Saquarema and Turitella project loans as the units commenced production in 2016.
The increase in the interest addition to provisions was primarily due to the time-passing effect of the provision for potential contemplated settlement with Brazilian authorities and Petrobras recognized in 2015.
The increase of the net foreign exchange loss is mainly due to the depreciation of the Nigerian Naira.
The interest expenses are disclosed net of US$ 37 million capitalized interest (2015: US$ 48 million) related to FPSO projects under construction.