ANNUAL REPORT 2017 Director-General's Statement
ANNUAL REPORT 2017 LFV is with you on the travel
ANNUAL REPORT 2017 This is LFV
ANNUAL REPORT 2017 The Year in Brief
ANNUAL REPORT 2017 Operating Environment and Marke
t
ANNUAL REPORT 2017 Strategy and Objectives
ANNUAL REPORT 2017 Customer Focus
ANNUAL REPORT 2017 Environment
ANNUAL REPORT 2017 Aviation Safety
ANNUAL REPORT 2017 Innovation
ANNUAL REPORT 2017 Cooperation and Partnerships
ANNUAL REPORT 2017 Employees
ANNUAL REPORT 2017 Board of Director's Report
ANNUAL REPORT 2017 Income Statement, Comments on t
he Income Statement
COMMENTS ON THE INCOME STATEMENT VIGNETTE Deviati
ons from the set charges are only permitted in some specific cases. One deviation that is permitted is uncontrollable changes with respect to pension costs. Pension costs for both 2016 and 2017 have increased due to interest rate changes in the calculation basis that affect state-owned enterprises’ pension liability. However, the parts of the pension cost increase that affect the route charges were approximately SEK 113 million higher in 2017 than in 2016, hence the increase in air traffic revenue with regard to uncontrollable costs. LFV’s revenue for en route air navigation services is based on the number of service units, which have increased by 6.2 per cent compared to 2016. On 1 January 2017, Sweden’s route charge was raised by 0.2 per cent. Thus, the main cause is the increased traffic volume, and the increased number of service units, which the invoicing is based on. The increased traffic increases LFV’s revenue, but the regulation framework in force contains a traffic risk sharing arrangement. This entails that LFV may reatain the revenue in full for increases in traffic up to 2 per cent, compared to the performance plan for 2015–2019. For increases in traffic in traffic between 2–10 per cent, LFV may retain 30 per cent of the increased revenue. The remaining part will benefit the airlines through reduced charges. In 2017, the traffic volumes were around 8 per cent above the performance plan. Charges for local air navigation services at state-owned, military, municipal and private airports remain at the same level as the previous year. Other operating revenue amounted to SEK 921 million (947). This includes compensation from the associated company NUAC with SEK 712 (714) million. An equivalent amount can also be found under “Various external costs” as LFV purchases air traffic management from NUAC, at the same time as it receives payments for staff and services rendered. Revenue from other commercial services and export of services is at level with 2016. A prudent assessment and valuation of certain revenue and receivables related to the international market has been carried out. The receivables of the subsidiary LFV ANNUAL REPORT 2017 LFV Aviation Consulting AB, which are overdue and not yet paid, are presented as uncertain in full, due to long credit periods and uncertainty in when they will be settled. During the year, LFV received EU grants relating to the financing of investment and development activities. Grants for research and innovation have also been obtained from the Swedish Transport Administration to develop and improve the efficiency of air navigation services. The value of work performed by the company for its own use and capitilised in 2017, is SEK 31 million, for investment projects. Operating expenses Operating expenses amounts to SEK 3,008 million (2,911). The increased expenses are primarily due to higher pension costs and depreciations. The staff costs have increased with SEK 69 million, to SEK 1,636 million (1,567). General wage rate increases, as well as increased costs for pensions are the main causes for the increased expenses. The normal wage rate increase is largely compensated by a slight reduction of the staff volume, compared to the previous year. One factor that also has had an impact on costs in 2017 is the discounting rate that the National Government Employee Pensions Board (SPV) annually sets in November and which is applied when calculating the present value of accrued pension rights and state-owned enterprises’ pension liability. A further reduction of the discount rate has been made, from -0.3 per cent to -0.6 per cent. The reduction of the year with 0.3 per cent entails a cost increase for LFV of around SEK 390 million, of which the main part, for accounting purposes is classified as a financial cost. About 80 per cent of the additional cost is financed through the system of charges, while the remaining approximately SEK -70 million directly affects revenue. Miscellaneous external costs amount to SEK 1,207 million (1,195). The cost increase of SEK 33 million, compared to the previous year, is due to doubtful customer receivables. Positive effects for the year, compared to 2016, are mainly lower costs for air traffic controller training, and lower use of external services in the form of 41 consultancy support. Otherwise, the costs are unchanged and mainly for operation, maintenance, and technical support for operative systems. The depreciations are higher than 2016, and amounts to SEK 164 million (148). This is due to large new investments in facilities, which have become operational during the year. Financial items The sum of financial items and costs amounted to SEK -319 million (-224). The dominant item in net financial income consists of the interest portion of the year’s change in pension liability. Net changes in interest rate and the calculation basis, which are presented as a financial cost is SEK 92 million higher this year than in 2016. As a result of the interest rate situation, the interest income on LFV’s cash and cash equivalents has been very low in the last two years. The interest income amounted to SEK 4 million (7) in 2017. LFV Holding AB The turnover for the group in 2017 is SEK 59 million and the loss after financial items are SEK -2 million. The turnover and loss after financial items are mainly derived from the subsidiary LFV Aviation Consulting AB. The turnover, according to the determined annual account for LFV Holding Group in 2016 is SEK 26 million, and the loss after financial items are SEK -26 million. This entails a reduction of SEK -29 million compared to the assessments and the account during the submitting of the annual report for the LFV Group in 2016. The negative result for 2016 was due to a prudent valuation of accrued revenue and receivables in LFV Aviation Consulting AB from the previous years. Annual accounts for the financial year 2017 for LFV Holding AB and its subsidiaries and associated companies are not yet determined on respective general meeting.
ANNUAL REPORT 2017 Balance Sheet
ANNUAL REPORT 2017 Comments on the balance sheet a
nd funds statements
ANNUAL REPORT 2017 Financing
ANNUAL REPORT 2017 Accounting and Valuation Princi
ples
ANNUAL REPORT 2017 Notes
ANNUAL REPORT 2017 Investments
ANNUAL REPORT 2017 Reporting in Accordance with Pe
rformance Plan
ANNUAL REPORT 2017 Reporting in Accordance with Ap
propriation Directions
ANNUAL REPORT 2017 Risk Management
ANNUAL REPORT 2017 Dividend Proposal
ANNUAL REPORT 2017 Audit Report
ANNUAL REPORT 2017 Board of Directors
ANNUAL REPORT 2017 Group Management
ANNUAL REPORT 2017 Five Years at a Glance
ANNUAL REPORT 2017 Abbreviations and Explanations