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Notes to the parent company financial statements

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1. Other operating income
MEUR 2018 2017
Rental income 1 1
Services to Group companies 78 71
Other 1 1
Total 80 72
2. Personnel expenses
MEUR 2018 2017
Wages and salaries -19 -57
Pension costs -5 -5
Other compulsory personnel costs -1 -1
Total 26 -63
Salaries and remunerations paid to senior management
The President and CEO and his deputy and members of the Board of Directors -4 -3
The President and CEO has the right to retire at the age of 63 years. The members of the Board of Management are entitled to retire on reaching the statutory retirement age. One member of the Board of Management is entitled to retire earlier, on reaching 60 years of age.
The Company's Board of Directors decides the remunerations of the President and CEO and his immediate subordinates.
Additional information about Management remuneration can be found in Consolidated Financial Statements Note 28.
Personnel on average during the year 371 324
3. Depreciation and amortisation
MEUR 2018 2017
Depreciation and amortisation according to plan
Other long-term expenditure -3 -4
Total depreciation according to plan -4
Impairment losses on non-current assets -1
Tax depreciations -4 -4
Depreciation difference 1 1
Depreciation difference
Depreciation difference on 1 January 2 2
Change in the depreciation difference -1 -1
Depreciation difference on 31 December 1 2
4. Financial income and expenses
MEUR 2018 2017
Dividend income
From Group companies 300 146
Total 300 146
Other interest income
From Group companies 28 22
From other companies 1 1
Total 29 22
Other financial income
From Group companies 24 10
From other companies 20 9
Total 45 19
Exchange gains and losses -1 1
Interest expenses
To Group companies -6 -5
To other companies -9 -8
Total -14 -13
Other financial expenses
To Group companies -21 -10
To other companies -42 -15
Total -62 -25
Financial income and expenses, total 296 151
5. Income taxes
MEUR 2018 2017
Income taxes
For the financial period -4 -3
For prior financial periods -6
Total -10 -3

 

6. Fixed assets
Intangible assets
MEUR Other
long-term
expenditures 		Construction
in progress 		Total 2018 Total 2017
Acquisition cost at January 1 121 2 123 122
Additions 1 6 7 3
Disposals -5 -5 -1
Acquisition cost at December 31 117 8 125 123
Accumulated amortisation at January 1 -115 -115 -113
Accumulated amortisation on disposals and other changes 5 5 1
Amortisation during the financial period -3 3 -4
Accumulated amortisation at December 31 -113 -113 -115
Carrying amount at 31 December 2018 3 8 12
Carrying amount at 31 December 2017 6 2 8
Tangible assets
MEUR Land
and
water 		Buildings
and
structures 		Machinery, equipment and other tangible assets Construction
in progress 		Total 2018 Total 2017
Acquisition cost at January 1 7 2 4 13 13
Additions 6 6 1
Disposals -2 -3
Acquisition cost at
December 31 		7 2 2 6 17 13
Accumulated depreciation at
January 1 		-2 -3 -5 -4
Accumulated amortisation on disposals and other changes 2 3
Impairment losses on non-current assets -1
Accumulated depreciation at December 31 -2 -1 -3 -5
Carrying amount at 31 December 2018 7 1 6 14
Carrying amount at 31 December 2017 7 1 2 9
Shares and securities
MEUR Shares in
Group
companies 		Shares in
other
companies 		Total 2018 Total 2017
Acquisition cost at January 1 950 1 951 951
Disposals -1
Acquisition cost at December 31 950 1 951 951
Carrying amount at 31 December 2018 950 1 951
Carrying amount at 31 December 2017 950 1 951
7. Non-current receivables
MEUR 2018 2017
Receivables from Group companies
Loan receivables 100 104
Total 100 104
8. Current receivables from Group companies
MEUR 2018 2017
Trade receivables 16 6
Loan receivables 2 153 1 657
Derivatives 54 19
Other receivables 76 99
Prepaid expenses and accrued income 10 4
Total 2 308 1 786
9. Prepaid expenses and accrued income
MEUR 2018 2017
Derivatives 12 32
Other financial items 1
Insurance receivables 1
Other 4 3
Total 16 35

 

10. Shareholders' equity
MEUR 2018 2017
Share capital
Share capital on January 1 336 336
Share capital on December 31 336 336
Share premium reserve
Share premium reserve on January 1 61 61
Share premium reserve on December 31 61 61
Retained earnings
Retained earnings on January 1 1 002 1 097
Dividends paid -272 -256
Result for the financial period 308 161
Retained earnings on December 31 1 038 1 002
Total shareholders' equity 1 435 1 399
Distributable equity 1 038 1 002
11. Liabilities
MEUR 2018 2017
Non-current
Interest-bearing 741 508
Total 741 508
Current
Non-interest-bearing 155 133
Interest-bearing 1 349 1 032
Total 1 504 1 165
Debt with maturity profile
2018 Current Long-term
MEUR <1 year 1-5 years >5 years Total
Loans from financial institutions 56 491 250 797
Total 56 491 250 797
2017 Current Long-term
MEUR <1 year 1-5 years >5 years Total
Loans from financial institutions 75 342 166 583
Loans from pension institutions 8 8
Total 83 342 166 591

 

12. Accrued expenses and deferred income
MEUR 2018 2017
Income and other taxes 5
Derivatives 79 45
Personnel costs 11 35
Interest and other financial items 3 3
Other 5 4
Total 102 85
13. Liabilities to Group companies
MEUR 2018 2017
Trade payables 9 3
Other current liabilities 1 293 950
Derivatives 24 29
Accrued expenses and deferred income 2 3
Total 1 327 985
14. Financial assets and liabilities by measurement category
2018
MEUR Measured
at
amortised
cost 		At fair
value
through
the
statement
of income 		Carrying
amounts
of the
statement
of financial
position
items 		Fair
value
Non-current financial assets
Interest-bearing receivables from Group companies 100 100 100
Other receivables 1 1 1
Current financial assets
Interest-bearing receivables from Group companies 2 153 2 153 2 153
Trade receivables from Group companies 16 16 16
Derivatives 12 12 12
Derivatives from Group companies 54 54 54
Other receivables from Group companies 8 8 8
Cash equivalents 5 5 5
Cash and bank 286 286 286
Carrying amount by category 2 569 65 2 635 2 635
Non-current financial liabilities
Interest-bearing debt 741 741 747
Current financial liabilities
Interest-bearing debt 56 56 56
Interest-bearing debt to Group companies 1 293 1 293 1 293
Trade payables 18 18 18
Trade payables to Group companies 9 9 9
Derivatives 79 79 79
Derivatives to Group companies 24 24 24
Other liabilities 3 3 3
Carrying amount by category 2 120 103 2 223 2 229
Information about fair value hierarchy and valuation principle can be found in in Consolidated Financial Statements Note 16.
2017
MEUR Measured
at
amortised
cost 		At fair
value
through
the
statement
of income 		Carrying
amounts
of the
statement
of financial
position
items 		Fair
value
Non-current financial assets
Interest-bearing receivables from Group companies 103 103 103
Other receivables 1 1 1
Current financial assets
Interest-bearing receivables from Group companies 1 657 1 657 1 657
Trade receivables from Group companies 6 6 6
Derivatives 32 32 32
Derivatives from Group companies 19 19 19
Other receivables 2 2 2
Other receivables from Group companies 3 3 3
Cash equivalents 16 16 16
Cash and bank 179 179 179
Carrying amount by category 1 969 51 2 019 2 019
Non-current financial liabilities
Interest-bearing debt 508 508 515
Current financial liabilities
Interest-bearing debt 83 83 83
Interest-bearing debt to Group companies 950 950 950
Trade payables 10 10 10
Trade payables to Group companies 3 3 3
Derivatives 45 45 45
Derivatives to Group companies 29 29 29
Other liabilities 3 3 3
Other liabilities from Group companies 1 1 1
Carrying amount by category 1 557 74 1 631 1 639
Information about fair value hierarchy and valuation principle can be found in in Consolidated Financial Statements Note 16.
15. Derivative financial instruments
MEUR With external financial institutions With Group companies Total 2018
Nominal values of derivative financial instruments
Currency forwards, transaction risk 2 821 2 799 5 620
Interest rate swaps 270 270
Cross currency swaps 238 238
6 128
Fair values of derivative financial instruments (level 2)
Currency forwards, transaction risk -55 30 -25
Interest rate swaps -4 -4
Cross currency swaps -8 -8
Total -37
MEUR With external financial institutions With Group companies Total 2017
Nominal values of derivative financial instruments
Currency forwards, transaction risk 1 927 1 707 3 635
Interest rate swaps 165 165
Cross currency swaps 74 74
3 874
Fair values of derivative financial instruments (level 2)
Currency forwards, transaction risk 6 -10 -4
Interest rate swaps -2 -2
Cross currency swaps -17 -17
Total -23
Foreign currency forward contracts are against transactional risks and are matched against the hedged cashflows. Interest rate swaps are denominated in euros and their average interest-bearing period is 18 (26) months. The average maturity for cross currency swaps is 40 (53) months.
16. Financial risks
General
Wärtsilä has a centralised Group Treasury with two main objectives: 1) to arrange adequate funding for the Group’s underlying operations on competitive terms and 2) to identify and evaluate the financial risks within the Group and implement the hedges for the Group companies. Group Treasury is organizationally within the Parent Company.
The details about the management of the Group's financial risks are in the Note 30 of the Consolidated Financial statements. As the Group's liquidity and interest rate risks are managed at the parent company level the group reporting applies fully to the Parent Company.
Foreign exchange risk
Operative foreign currency risks are followed and hedged at the subsidiary level. Group Treasury acts as a counterparty to these hedges, if that is allowed by local regulations. To enable netting of intragroup currency flows and to reduce the amount of external transactions Group Treasury is allowed to have minor unhedged exposures in different currencies. Any gains/losses from Group Treasury's operations are booked directly into the financial items and we do not expect any material foreign exchange gains/losses from Group Treasury's operations.
17. Collateral, contingent liabilities and other commitments
MEUR 2018 2017
Guarantees and contingent liabilities
On behalf of Group companies 3 215 737
Total 3 215 737
Future nominal lease payments
Payable within one year 4 3
Payable after one year 32 36
Total 36 39

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