Accounting principles

Terrafame Ltd is domiciled in Sotkamo, Finland. The company is part of the Terrafame Group, whose parent company, Terrafame Group Ltd, is domiciled in Helsinki, Finland.   Copies of the consolidated financial statements are available at Terrafame Group Ltd's office and can be viewed on the company's website at www.terrafame.com.

Basis of preparation

The company has prepared its financial statements in accordance with Finnish accounting legislation and Finnish Accounting Standards (FAS). The financial statement information is reported in tables and related texts in thousands of euros and in the report of the Board of Directors in millions of euros to one decimal place. The comparative figures reported in brackets are figures for the financial period 2016. All the presented figures have been rounded according to general rounding rules, so the sum of the individual figures may be different from the sum presented. Key figures have been calculated using exact values. Comparative information has been adjusted where necessary to correspond with the information of the year under review.

Operational continuity (going concern)

The financial statements on 31 December 2017 were prepared on a going concern basis. Thanks to the financing implemented in 2017, the finalisation of the ramp-up has been secured and business can continue for the foreseeable future.

An ownership and financing arrangement was carried out at Terrafame Ltd in February 2017. The arrangement amounted to EUR 250 million in total. In November 2017, a financing arrangement totalling USD 200 million was carried out, concerning investment in a battery chemical plant. Part of the funding from November is available for the financing needs of the final stages of the ramp-up. As a result of the financing arrangements, Terrafame Ltd has the funding necessary to complete the ramp-up of production and to achieve positive cash flow. The investment commitment of EUR 50 million granted by the parent company in the February financing round is unused. Of the November arrangement, the company has withdrawn USD 50 million, after which USD 150 million is unused.

Translation of items denominated in foreign currencies

Transactions in foreign currencies are entered in euros at the rates prevailing at the transaction date or average rates provided by central banks. Foreign currency-denominated receivables and liabilities have been translated into euros using the rates prevailing at the balance sheet date. Foreign exchange gains and losses related to business operations are included in the corresponding items of net sales, operating expenses or financial income and expenses.

Revenue recognition

Revenue is recognised from a sale when evidence of an arrangement exists, the title has been transferred to the customer, the price is determinable and collection of the sales price is reasonably assured. Revenue is recognised net of sales-related foreign exchange gains and losses and any applicable sales taxes. Most sales are priced in US dollars. The time of revenue recognition is determined on the basis of the terms of delivery used.

A large proportion of the company's production is sold under long-term contracts, but sales revenue is only recognised on individual sales when persuasive evidence exists that all of the following criteria have been met:

  • all material risks and rewards of ownership have been transferred to the buyer;
  • there is no continuing managerial involvement to the degree usually associated with ownership or effective control over goods sold;
  • the amount of revenue can be reliably determined;
  • the costs incurred or to be incurred in respect of the sale can be reliably determined; and
  • the flow of future economic benefits to the seller is probable.

Upon delivery, a preliminary invoice is drawn based on preliminary analysis and measurement results and the market prices at the time of delivery. Preliminary invoices are entered as sales. The final analysis and measurement results are normally obtained within a few months. Any preliminary invoices are adjusted based on the final analysis and measurement results. Furthermore, the prices of delivered metals are adjusted to correspond to the market prices of the agreed pricing period.

With regard to preliminary invoices for which final analysis and measurement results have not yet been obtained, the sales prices and euro-denominated valuations are adjusted so as to correspond to the average market prices of the month of the financial statements and the exchange rates at the date of closure of the accounts. With regard to these deliveries, the company also considers the need to make write-downs due to the changes in analysis and measurement results. Such write-downs were not made in the financial statements of 31 December 2017. The fixed-price metal hedges for metal tonnes sold have been taken into account in the valuation of sales.

Pension obligations

The company has pension schemes in accordance with local conditions and practices. These are arranged with an external insurance company. Pension costs are entered as expenses in the year in which they occur.

Borrowing costs

Borrowing costs are recognised as expenses in the period during which they are incurred.

Deferred tax assets and liabilities

Deferred tax assets and liabilities are calculated on temporary differences between the book value and taxable value, using the tax rates enacted by the balance sheet date. Deferred tax assets arising from taxable losses carried forward are recognised up to the amount for which there is likely to be taxable income in the future, and against which the temporary difference can be used. Deferred tax assets with respect to the fair values of derivative contracts have been recognised in the balance sheet of 31 December 2017.

Tangible assets

Tangible assets have been recognised in the balance sheet at cost, less planned depreciation. Non-current tangible assets include, among other things, buildings, infrastructure, machinery and equipment used in mining operations, laboratory equipment, vehicles, roads, power lines and structures for environmental protection. Acquisition cost includes expenditure that is directly attributable to the acquisition, construction or production of the item.

Non-current assets bought from the bankruptcy estate of Talvivaara Sotkamo Ltd on 15 August 2015 have been amortised in accordance with the original depreciation plan by applying the normal planned depreciation periods, with the exception that a write-down of approximately EUR 76 million was made on the acquired tangible assets: the net expenditure of acquired tangible assets as at 15 August 2015 was approximately EUR 202.6 million, on which a write-down of EUR 76 million was made, and the acquired tangible assets were entered in the company’s balance sheet in the amount of EUR 126.6 million.

Spare parts with a useful life of more than one year have been recognised in non-current assets in the 2017 financial statements. In the financial statements of 31 December 2016, they were recognised in inventories. Spare parts recognised in non-current assets had a total value of EUR 6.4 million in the balance sheet of 31 December 2017.

Where parts of an item of tangible assets have different useful lives, they are accounted for as separate items.

Construction in progress and land are not depreciated. Depreciation on other assets is calculated using the straight-line method to allocate their cost over their estimated useful lives, as follows:

 

Roads 25 years
Buildings and structures 10–40 years
Leaching heap foundations 10–15 years
Machinery and equipment 4–25 years
Furniture, fixtures and fittings 5–10 years
Vehicles 5–10 years
Fixed asset spare parts 3 years
Structures for environmental protection 25 years

Net expenditures are reassessed in connection with each financial statement. The reassessment is based on the company's estimates of ore reserves, mineral resources, production capacity and other relevant factors.
 
Gains and losses on disposals are determined by comparing the proceeds with the book value and are recognised within other operating income or expenses, respectively, in the income statement.

Intangible assets

Other intangible assets

Other intangible assets are recognised in the balance sheet at cost, less planned depreciation. Other intangible assets mainly comprise IT applications and geodata supporting the company's business operations, which are amortised over 3–5 years.

Research and development expenditure

Research expenditure is recognised as an expense as incurred. The company has not capitalised development expenditure during the financial period 2017 or earlier.

Inventories

The company classifies its inventories into three groups: raw materials and consumables, work in progress, and finished products.

Raw materials and consumables are valued at the average acquisition cost of the goods in stock. A so-called write-down on slow-moving items is made on the slow-moving goods in the raw materials and consumables inventory. If an item has been in stock for more than a year, a write-down of 25% is made. The write-down increases 25% annually, so the value of an item that has been in storage more than four years is zero.

Work in progress and finished products (metal content for sale) are presented in the balance sheet as valued at actual production costs but up to the net realisable value of the products on the balance sheet date. Net realisable value refers to the estimated selling price in the ordinary course of business, less the production costs necessary to complete the sales.

The acquisition cost of work in progress and finished products (production cost) includes the fixed and variable costs of production and maintenance that supports production, as well as depreciation on these functions, based on the realised production costs in the production process. The acquisition cost excludes borrowing costs.

Finished products include nickel cobalt sulphide, zinc sulphide and copper sulphide. Work in progress includes metals in the ore in primary and secondary heaps, as well as metals in the leaching process or metal precipitation and filtration process that can be processed for sale as a finished product.

The amount of metal contained in work in progress is measured by calculating the metal tonnes added to and removed from the production process. The recoverable quantities of nickel, zinc, copper and cobalt included in work in progress are determined based on the estimated ore concentrations based on geological studies, the estimated recovery percentages of metals in the bio heap leaching process and the recovery percentages of the metals recovery plant.

Ore concentrations, the amount of metals in the production process and the metals recovery percentage are reviewed monthly.

The company’s finished products on 31 December 2017 were valued in accordance with the net realisation principle, as the acquisition cost of finished products calculated on a cost basis was higher than the net realisable value. Work in progress was valued for the first time in the company's financial statements for 2017 on a cost basis, as it was lower than the net realisable value. The value of work in progress on a cost basis was EUR 138.0 million on 31 December 2017.

The value of work in progress determined according to the principle of net realisation value includes discretionary factors related to, for example, the measurement of metal volume in work in progress, metals recovery percentages, production costs necessary to complete sales and sales prices.

Derivatives and hedge accounting

Derivatives

The derivatives used by the company were acquired for hedging purposes, and hedge accounting has been applied to them. Any unrealised change in the value of derivatives that are considered effective hedges are recognised, in accordance with Section 5:2a of the Finnish Accounting Act, at fair value in the balance sheet’s fair value reserve as per the valuation report for the last day of the reporting period. The fair values of derivatives are based on valuations of external counterparties, which have been verified by the company.

The realised earnings effects of changes in the value of effective hedging instruments that are covered by hedge accounting are presented uniformly with the hedged item.  If case of any ineffective hedging, changes in the fair value of hedging instruments are recognised in profit or loss.

Hedge accounting

The company applies hedge accounting in accordance with Section 5:2a of the Finnish Accounting Act to all hedging instruments it holds. At the beginning of the hedging arrangement, the relationship between each hedging instrument and the hedged asset, as well as the risk management objectives, are documented by hedging instrument type. The effectiveness of the hedging relationship is assessed at the beginning of the hedging and in connection with each quarterly accounts.

Cash flow hedging

The company's hedging activities are entirely focused on cash flow hedging. Changes in the fair values of derivatives acquired for the purpose of hedging forecasted cash flows are recognised in the fair value reserve under equity. Changes in fair value are recognised in profit or loss for the same periods in which hedged cash flows affect the result.

Provisions

Provisions are recognised when the company has a present legal or constructive obligation as a result of past events, and when it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount of the obligation can be made.

A provision is made for mine closure costs and legal claims on the following conditions: the obligation relates to a closed or prior financial period, its materialisation is deemed certain or likely upon preparation of financial statements, the corresponding income is neither certain nor likely, the obligation is based on law or commitment to third parties, and the obligation can be identified but its precise amount or time of realisation is not known.

Rehabilitation provision for mine closure and environmental clean-up costs

A rehabilitation provision for mine closure costs is made with respect to the estimated future costs of closure and restoration, and for environmental restoration and rehabilitation to the condition required by the environmental permits granted for mining operations.

Prevention of the threat of environmental pollution entails environmental and landscaping obligations. After mining operations have ceased, any machinery and equipment, chemicals, fuels and waste involving the risk of environmental pollution must be removed from the site. This will be carried out as part of normal mining operations. In addition, open pits must be restored to the condition required by public safety.

The majority of the estimated restoration costs arises from the closure of waste rock dumps and primary and secondary leaching areas, the treatment and clean-up of primary and secondary leaching solution channels, the construction, covering and landscaping of gypsum ponds, the clean-up of waters and precipitates caused by the gypsum pond leak of 2012, the treatment of rock drainage, the fencing of open pits and the ex post supervision of the mining site.

The mine closure plan is based on the covering of areas with water- and oxygen-impermeable material, and long-term aftercare. It is assumed that environmental monitoring of the mine will continue for 30 years after closure of the mine.

Restoration costs have been estimated in accordance with the cost level at the date of closure of the accounts.

The bioleaching method used by Terrafame is of such a nature that the process cannot be stopped abruptly at the end of operations. In order to ensure environmental safety, bioleaching must be continued until most of the metals have been recovered at the metals recovery plant. Also, the safe management of solution circulation requires a phased ending. Mining and ore crushing will be terminated after the closure decision.

The shutdown of bioleaching and metals recovery production processes is expected to last approximately three to four years. During the first two years, primary phase leaching will be terminated, and primary leaching ore will be transferred to the secondary heap in accordance with permit requirements. In the first two years, the metals recovery plant will normally be operated on hydrogen sulphide precipitation, and the resulting metals will be sold. During this time, detailed closure plans will be drawn up, and regulatory processes required for closure will be initiated.

After the third year, bioleaching will still be operational in secondary leaching, and when the metal concentrations of the solution decrease, the metals production plant will transfer to sodium hydrogen sulphide precipitation, which will continue to produce small amounts of product for sale. This phase is estimated to last from one to two years, after which the bioleaching and the operations of the metals production plant will be discontinued, and the dilute solutions formed will be treated either at the central water treatment plant or by any other suitable purification method.

The environmental provision for the closure of the mine of EUR 159.4 million has been set to cover the closure costs for thirty years from the date the actual closure measures commence. The environmental provision covers, for example, closure of waste areas, necessary soil rehabilitation measures, solution and water management, and environmental monitoring. It is estimated that the central water treatment plant will be used for around 10 years, after which lighter purification methods will be adopted. The company assesses the amount of the environmental provision annually. The assumption is that a decision on the closure of mining operations would have been made at the balance sheet date.

Notes to the balance sheet

 

2.1 Intengible assets

(EUR 1,000) Intangible
rights
Other
capitalized
long-term
expenditure
Investments
in progress
Total

Carrying amount at 31 Dec 2016

1,586

8
 
1,593


Gross carrying amount at 1 Jan 2017


1,837


19


0


1,856
Increase 32 0 338 369
Capitalisation for per year 0 125   125
Gross carrying amount at 31 Dec 2017 1,868 144 338 2,350

Accumulated amortisation and impairment losses at 1 Jan 2017


251


11


0


262
Amorsation for the year 380 33 0 413

Accumulated amortisation and impairment losses at 31 Dec 2017


631


44


0


676

Carrying amount at 31 Dec 2017

1,237

100

338

1,674

Investments in progress in intangible assets are presented as a separate column in the intangible asset group as of 2017. 

2.2 Tangible assets

(EUR 1,000) Land Buildings Machinery and equipment Other tangible assets Construction in progress Total

Carrying amount at 31 Dec 2016


145


49,356


68,048


51,564


52,155


221,269

Gross carrying amount
at 1 Jan 2017


145


53,479


78,096


54,836


52,155


238,710
Increase 125 35 7,908 0 84,165 92,233
Capilisation for the year 0 14,194 29,828 46,349   90,370
Transfers         -90,370 -90,370
Decrease 0 0 -114 0 0 -114
Gross carrying amount
at 31 Dec 2017

270

67,708

115,717

101,184

45,950

330,829

Accumulated amortisation and impairment losses at 1 Jan 2017



0



4,122



10,047



3,271



0



17,441
Decrease 0 0 0 0 0 0
Amortisation for the year 0 3,765 11,757 3,905 0 19,428
Depreciation for reductions
0

0

-68

0

0

-68
Accumulated amortisation and impairment losses at 31 Dec 2017

0


7,888


21,737


7,176


0


36,801

Carrying amount at 31 Dec 2017


270


59,820


93,980


94,008


45,950


294,028

2.3 Inventories

(EUR 1,000) 31 Dec 2017 31 Dec 2016

Raw materials and consumables

22,759

25,497
Work in progress 138,026 50,120
Finished goods 7,837 618
Total 168,622 76,235

The value of raw materials and consumables on 31 December 2017 includes a provision of EUR 5,681 thousand for slow-moving inventory, which reduces the value of inventory. The corresponding provision on 31 December 2016 was EUR 6,024 thousand.

2.4 Deferred tax assets

(EUR 1,000) 31 Dec 2017 31 Dec 2016

Deferred tax assets

1,125

0

According to estimates, the company has approximately EUR 181.4 million of confirmed and to-be-confirmed losses, and approximately EUR 12.6 million of deferred depreciation. The company has recognised deferred tax assets for derivatives in the balance sheet.

 

 

2.5 Amounts owed by Group companies

(EUR 1,000) 31 Dec 2017 31 Dec 2016

Trade receivables
Terrafame Group Ltd

32

0
Total 32 0

 

 

2.6 Prepayments and accrued income

(EUR 1,000) 31 Dec 2017 31 Dec 2016

Other prepayments and accrued income

7,306

2,746
Derivative receivables 11,740 0
Total 19,046 2,746

2.7 Equity

(EUR 1,000) 31 Dec 2017 31 Dec 2016

Subscribed capital at the beginning of the period

2,000

2,000
Subscribed capital at the end of the period 2,000 2,000

Fair value reserve at the beginning of the period

0

0
Increase 90,911 0
Decrease 95,413 0
Fair value reserve at the end of the period -4,501 0

Invested unrestricted equity at the beginning of the period

379,800

98,000
Investment in invested unrestricted equity 144,606 281,800
Invested unrestricted equity at the end of the period 524,406 379,800

Retained earnings at the beginning of the period

-216,660

-91,748
Retained earnings at the end of the period -216,660 -91,748

Loss for the period

-9,601

-124,912

Retained earnings

-226,261

-216,660

Total equity

295,643

165,140

Restricted equity at the end of the period

31 Dec 2017

31 Dec 2016
Subscribed capital 2,000 2,000
Fair value reserve -4,501 0
Distributable equity at the end of the period -2,501 2,000

 

Distributable equity at the end of the period

(EUR 1,000) 31 Dec 2017 31 Dec 2016

Retained earnings

-216,660

-91,748
Loss for the period -9,601 -124,912
Fair value reserve -4,501 0
Invested unrestricted equity 524,406 379,800
At the end of the period 293,643 163,140

The fair value reserve comprises the market value of derivatives covered by hedge accounting.

2.8 Notes to hedging derivatives

    1.1-31.12.2017     1.1.-31.12.2016   2017 2016
(EUR 1,000) Positive
fair value
Negative
fair value
Fair
net value
Positive
fair value
Negative
fair value
Fair
net value
Notional
amount
Notional
amount

Currency and interest rate derivatives


 
             
   Foreign
   exchange
   forwards
118 0 118 0 0 0 19,000 0
   Currency
   options
448 0 448 0 0 0 7,500 0

Metal derivatives

 

 
       
Tonnes

Tonnes
   Nickel
   forward
   contracts
0 993 -993 0 0 0 2,850 0
   Nickel
   options,
   sold

2,183

2,550

-367

0

0

0

1,200

0
      0     0    
      0     0    
   Nickel
   forward
   contracts
0 555 -555 0 0 0 8,000 0
   Zinc
   options,
   sold

8,991

13,269

-4,278

0

0

0

38,400

0

Derivatives
total


11,740


17,366


-5,627


0


0


0
   

Short-term
derivatives


11,740


17,366


-5,627


0


0


0
   

 

(EUR 1,000) 31 Dec 2017 31 Dec 2016

Derivative assets
   
   Balance assets, gross amount 11,740 0

Derivative liabilities
   
   Balance liabilities 17,366 0

The fair value calculation of hedges is based on market rates and quotations on the balance sheet date in accordance with the hedging portfolio. Counterparties for derivative transactions have been approved in accordance with the company's hedging policy. Intercompany receivables and liabilities are connected on a transaction level with each counterparty and accounted for on a daily level by transaction.

The importance of financial instruments to the company's financial position on 31 December 2017 is not significant when considered in relation to the scope of the company's business. Of greatest significance are zinc and nickel option structures, the maximum risk of which was EUR 6.7 million on the balance sheet date. If realised, it would weaken the company's reported net sales and cash flow in the financial period 2018. The company has not made longer-term hedges where the maximum risk was not limited.

2.9 Obligatory provisions

Long-term
(EUR 1,000)
31 Dec 2017 31 Dec 2016

Rehabilitation provision

 

 
At the beginning of the period 162,078 162,078
Increase 0 0
Decrease 2,666 0
At the end of the period 159,412 162,078
Long-term total 159,412  162,078

 Estimated cost of rehabilitation provision
   
Rehabilitation of primary and secondary heaps
and gypsum pond area

128,729

145,195
Repairing of gypsum pond leak damage 2012 20,100 10,300
Rehabilitation and fencing of the open pit area 2,583 2,583
Environmental monitoring of the mining area
after finishing rehabilitation
8,000 4,000
Estimated rehabilitation costs total  159,412 162,078

2.10 Long-term loans from credit institutions

(EUR 1,000) 31 Dec 2017 31 Dec 2016

Installment credit

 
 
At the beginning of the period 0 1,288
Increase 271 0
Decrease -70 -1,288
At the end of the period 201 0
Total
201

0

 

 

2.11 Long-term loans from credit institutions

(EUR 1,000) 31 Dec 2017 31 Dec 2016

At the beginning of the period

0

0
Increase 100,000 0
Decrease 0 0
Valuation -11,219 0
At the end of the period 88,781 0

Options and other rights
(pcs)

31 Dec 2017

31 Dec 2016
Batch 1 Maximum number of shares to be issued 566,712 0
Batch 2 Maximum number of shares to be issued 244,265 0
At the end of the period 810,977  0
     

Subscription period for the first batch is 10th Feb 2017–31st Dec 2022 and second batch 9th Nov 2017–31st Dec 2023. Option rights can be transferred to permitted transferee. Option rights are not allowed to be directly or indirectly pledged. The option rights may be exercised in one instalment. Agreed subscription price with option rights is 10 % higher than subscription price at the time the arrangement is implemented.

2.12 Specifications of Group liabilities

(EUR 1,000) 31 Dec 2017  312016

Short term liabilites to group comanies

 
 
Trade payables
Terrafame Group Ltd

128

89
Total 128 89

 

 

2.13 Short-term loans from financial institutions

(EUR 1,000) 31 Dec 2017 31 Dec 2016

Installment credit

 
 
At the beginning of the period 1,288 2,247
Increase 210 1,288
Decrease -1,367 -2,247
At the end of the period 130 1,288

Short-term loans from financial institutions

130

1,288
     

2.14 Current liabilities/Accruals and deferred income

(EUR 1,000)  31 Dec 2017  31 Dec 2016

Salaries, fees and other personnel expenses
8,291 6,281
Other accrued liabilities and deferred income 3,667 2,074
Derivative liabilities 17,366 0
Total 29,324 8,355

Notes to the income statement

3.1 Net sales

(EUR 1,000) 1 Jan31 Dec 2017 1 Jan31 Dec 2016

Industry distribution
 
 
Metals 220,024 101,042
Total 220,024 101,042

Geographical distribution
   
Europe 185,526 44,217
Asia 30,778 49,854
United States -248 6,396
Australia 2,969 575
Total 220,024 101,042

3.2 Materials and services included in cost of goods sold

(EUR 1,000) 1 Jan31 Dec 2017 1 Jan31 Dec 2016

Raw materials and consumables
 
 
   Purchases during the financial year -125,001 -102,863
   Change in stocks -2,739 7,237
  -127,740 -95 627

External services
-66,451 -67,256
Total -194,191 -162,883

 

Change in inventory, included in cost of goods sold

(EUR 1,000) 1 Jan31 Dec 2017 1 Jan31 Dec 2016

Chance in inventory
 
 
   Change in Work in progress 87,906 49,639

3.3 Personnel expenses

(EUR 1,000) 1 Jan31 Dec 2017 1 Jan31 Dec 2016

Wages and salaries
-30,992 -27,934
Pensions expenses -5,807 -5,234
Other personnel expenses -1,488 -1,785
Total -38,286 -34,954

Wages and fees for Members of Board of Directors
-165 -163


Average number of company personnel
1 Jan31 Dec 2017 1 Jan31 Dec 2016
Salaries and senior salaried 218 166
Blue-collar 476 460
Total 694 626

3.4 Depreciation, amortisation and impairment charges

(EUR 1,000) 1 Jan31 Dec 2017 1 Jan31 Dec 2016

Intangible assets
-380 -236
Other capitalised long-term expenditure -33 -9
  -413 -244

Tangible assets
   
   Buildings -3,765 -3,177
   Machinery and equipment depreciation -11,757 -8,074
   Other tangible assets depreciation -3,905 -2,487
  -19,428 -13,737

Total
-19,841 -13,982

 

3.5 Administrative expenses

(EUR 1,000) 1 Jan31 Dec 2017 1 Jan31 Dec 2016

Wages and fees
-3,088 -3,558
Contributions -657 -1,172
Depreciation and amortisation -183 -167
External services -5,686 -5,262
Insurances -1,800 -2,646
Administration, other -3,668 -1,061
Finance and IT, other -461 -514
EHSQ, other -398 -358
HR, other -153 -665
Communications, other -81 -89
Other -460 68
Total -16,636 -15,423

3.6 Auditors' fees

(EUR 1,000) 1 Jan31 Dec 2017 1 Jan31 Dec 2016

Audit
-80 -84
Tax consultancy -1 -4
Other services -14 -34
Total -95 -122
 
 

3.7 Finance income

(EUR 1,000) 1 Jan31 Dec 2017 1 Jan31 Dec 2016

Other interest and finance income
12,260 10,188
Total 12,260 10,188

Other interest and finance income
include exchange change rate profit
11,439 0

Of finance income, EUR 11,219 thousand derives from unrealised finance income related to the valuation of foreign currency loans at the exchange rate of the balance sheet date.

 

3.8 Finance expenses

(EUR 1,000) 1 Jan31 Dec 2017 1 Jan31 Dec 2016

Other interest and finance expenses
-15,642 -567
Total -15,642 -567

Finance expenses to others
include exchange rate losses
-8,918 -425

Finance expenses include EUR 5,124 thousand of interest expenses and EUR 8,880 thousand of unrealised exchange rate losses.

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