12.Financial Result

Result from investments in affiliated companies

The result from investments in affiliated companies comprised mainly the loss of €20 million (previous year: loss of €23 million) from PO JV, LP, Wilmington, Delaware (USA), an associate accounted for using the equity method, and the gain of €7 million from Paltough Industries (1998) Ltd., Kibbuz Ramat Yochanan (Israel), accounted for using the equity method (previous year: gain of €1 million). In addition, this item includes €1 million (previous year: €2 million) in dividend income from other investments.

Net interest expense

Net interest expense was comprised as shown in the following table:

Net interest expense

 

 

 

 

 

 

 

2019

 

2020

 

 

€ million

 

€ million

Expenses

 

 

 

 

Interest and similar expenses

 

(48)

 

(50)

Interest expenses for FX derivatives

 

(37)

 

(23)

Income

 

 

 

 

Interest and similar income

 

7

 

6

Interest income from FX derivatives

 

33

 

20

Total

 

(45)

 

(47)

Interest and similar expenses primarily resulted from interest expenses from leases totaling €28 million (previous year: €33 million) and bonds issued by Covestro AG totaling €20 million (previous year: €14 million). Interest expense and interest income from forward exchange contracts included interest rate-induced fair value changes and the forward element.

Other financial result

The other financial result was comprised as shown in the following table:

Other financial result

 

 

 

 

 

 

 

2019

 

2020

 

 

€ million

 

€ million

Interest portion of interest-bearing provisions

 

(27)

 

(19)

Exchange gain

 

5

 

3

Miscellaneous financial expenses

 

(4)

 

(16)

Total

 

(26)

 

(32)

The interest portion of interest-bearing provisions mainly comprised €24 million (previous year: €31 million) in interest expense for pension and other post-employment benefit provisions plus €5 million in effects of interest income (previous year: €4 million) from interest rate fluctuations for other provisions and corresponding overfunding in fiscal 2020.

Miscellaneous financial expenses included losses from the decline in the fair values of money market funds and a contingent purchase price receivable (€4 million), expenses from the early termination of the syndicated credit facility (€2 million), expenses for financing the purchase price associated with the announced acquisition of the Resins & Functional Materials (RFM) business of Koninklijke DSM N.V., Heerlen (Netherlands), (€2 million), and negative interest income from money market funds (€2 million).