LFV Annual Report 2019 1
C OMMENT S ON THE INC OME S T ATEMEN T L F V 2019
Miscellaneous external costs Miscellaneous external costs amount to SEK 1,237 million (1,220), an increase of SEK 17 million in comparison with the previous year. There are several different external expenses that fluctuated between the years, but partially balance out each other on the whole for LFV. The effect of NUAC only conducting operations for 8 months in 2019 has now entailed a lower cost result because the re-invoicing of expenses only took place for that part of the year. Expenses for training of air traffic controllers, external consultants, costs for IT, operation and maintenance and technical equipment, etc. have, on the other hand, increased. Cost increases depend partly on mandates that are financed with appropriation, which are higher than in 2018. At the same time, expenses in the company group are lower, because payments of SEK 12 million were received for customer receivables that were reserved as unsecured. Reserves for unsecured customer receivables have dissolved as payments have been received. Depreciations Depreciations for 2019 amount to SEK 175 million (157). FINANCIAL INCOME AND EXPENSES The total financial income and expenses amounted to SEK -53 million (-145). A decrease of SEK 92 million in comparison with 2018. As a result of the interest situation, interest income on LFV's liquid assets has been low in recent years. Interest income, including currency exchange rate profit in 2019 amounted to SEK 13 million (1). The dominant item in net financial income for the year and the previous year consists of the interest element of the year’s change in pension liability. The previous year's result was influenced significantly by the reduction of discount interest that the National Government Employee Pensions Board (SPV) determines in November each year and is applied in the present value calculation of earned pension rights and the stateowned enterprise's pension liability. An additional decrease of interest took place from the 2018 to 2019 calculation. Discount interest was decreased from -0.6 per cent to -0.7 per cent. The decrease by 0.1 per cent unit entails a cost increase of approximately SEK 136 million for LFV, the majority of which, SEK 110 million, is reported as financial expenses and SEK 26 million as personnel costs. The effects of the 2019 calculation basis were reported in the annual report for 2018. There is no effect of the changed calculation basis to report in the 2019 annual report as a result of changed reporting principles. SPV's board of directors decided on changes to the calculation bases in November 2019 for the state-owned enterprises that take effect in 2020. The changes are in line with ESV's proposal that the state-owne enterprises should report the revaluation of the debt directly against equity and use the same actuarial principles that SPV applies for the pension business. The change also means that the possibility of reporting the debt in the annual report in accordance with next year's calculation bases is eliminated and thus reporting according to the 2020 calculation bases will take place for the first time for the year 2020 (not in the annual report of 31 December 2019). In November, SPV also decided on the gross interest rate for the calculation bases of 2020, which entails a reduction from -0.7 to -1.4 per cent, which has a negative influence on the liability. The pension liability will increase by SEK 794 million, which equates to 10.6 per cent, from 2019 to 2020. LFV HOLDING AB The group's turnover for 2019 amounts to SEK 24 million (28) and the profit after financial items amounts to SEK 22 million (42). Turnover originates primarily from the subsidiary LFV Aviation Consulting AB. The profit comes partly from this subsidiary, partly from shares of profit in LFV's associated companies Entry Point North AB and Saab Digital Air Traffic Solu47 tions AB, which is reported in the group according to the equity method. The relatively high profit in comparison with the turnover is a consequence of previous years' cautious valuation of accrued income and receivables. The principle is based on an cash basis, i.e. that a positive effect is reported on the profit at the time that the payment is received. There is positive effect on the year's profit before taxes of SEK 12 million (30). The associated companies have contributed with shares of the profit of SEK 11 million (7). Annual reports for the fiscal year 2019 for LFV Holding AB and its subsidiaries and associated companies have not been approved yet at annual meetings.