4.3.7Net Financing Costs
|
2017 |
2016 |
||
|---|---|---|---|
|
Interest income on loans & receivables |
9 |
14 |
|
|
Interest income on investments |
13 |
11 |
|
|
Interest income on Held-to-Maturity investments |
- |
0 |
|
|
Net foreign exchange gain |
3 |
- |
|
|
Other financial income |
2 |
1 |
|
|
Financial income |
27 |
26 |
|
|
Interest expenses on financial liabilities at amortized cost |
(231) |
(181) |
|
|
Interest expenses on hedging derivatives |
(88) |
(95) |
|
|
Interest addition to provisions |
(23) |
(17) |
|
|
Net loss on financial instruments at fair value through profit and loss |
- |
(2) |
|
|
Net cash flow hedges ineffectiveness |
(17) |
(2) |
|
|
Net foreign exchange loss |
0 |
(6) |
|
|
Other financial expenses |
- |
0 |
|
|
Financial expenses |
(358) |
(301) |
|
|
Net financing costs |
(331) |
(275) |
The increase in net financing cost is mainly due to the interest expenses related to FPSO Cidade de Marica (on hire as of February 7, 2016), FPSO Cidade de Saquarema (on hire as of July 8, 2016) and Turritella (FPSO) (on hire as of September 2, 2016).
The loss on net cash flow hedges ineffectiveness is due to the hedge accounting discontinuance of the interest rate swap on Turritella (FPSO) project loan which was repaid on January 16, 2018 after the receipt of the purchase price from Shell (please refer to note 4.3.1).
The interest addition to provisions is mainly due to the unwinding of the discounting impact on the provision for potential contemplated settlement with Brazilian authorities and Petrobras recognized in 2015.