Other financial income
Millions of euro | ||||
2019 | 2018 | Change | ||
Interest income from financial assets (current and non-current): | ||||
- interest income at effective rate on non-current securities and receivables | 126 | 93 | 33 | 35.5% |
- interest income at effective rate on short-term financial investments | 162 | 163 | (1) | -0.6% |
Total interest income at the effective interest rate | 288 | 256 | 32 | 12.5% |
Financial income on non-current securities at fair value through profit or loss | - | - | - | - |
Exchange gains | 915 | 910 | 5 | 0.5% |
Income on equity investments | 4 | 12 | (8) | -66.7% |
Other income | 1,262 | 1,190 | 72 | 6.1% |
TOTAL FINANCIAL INCOME | 2,469 | 2,368 | 101 | 4.3% |
Financial income, in the amount of €2,469 million, increased by €101 million compared with the previous year, due mainly to an increase in “Other income” as a result of the application to the Argentine companies of IAS 29 related to accounting for hyperinflationary economies (+€179 million).
See note 4.2 of the consolidated financial statements for the year ended December 31, 2019 for more information.
This was partly offset by the effect of the adjustment to fair value in 2018 of Enel Produzione’s financial receivable arising from the sale of 50% of Slovak Power Holding (€134 million).
Other financial expense
Millions of euro | |||||||
2019 | 2018 | Change | ||
Interest expense on financial debt(current and non-current): | ||||
- interest on bank borrowings | 386 | 408 | (22) | -5.4% |
- interest expense on bonds | 2,030 | 1,953 | 77 | 3.9% |
- interest expense on other borrowings | 183 | 127 | 56 | 44.1% |
Total interest expense | 2,599 | 2,488 | 111 | 4.5% |
Exchange losses | 1,229 | 1,378 | (149) | -10.8% |
Accretion of post-employment and other employee benefits | 135 | 107 | 28 | 26.2% |
Accretion of other provisions | 186 | 169 | 17 | 10.1% |
Charges on equity investments | 2 | 1 | 1 | - |
Other expenses | 1,104 | 734 | 370 | 50.4% |
TOTAL FINANCIAL EXPENSE | 5,255 | 4,877 | 378 | 7.8% |
Other financial expense amounted to €5,255 million, a total increase of €378 million compared with 2018. The change reflects the following factors in particular:
- an increase in other expenses of €370 million, due largely to:
- an increase of €252 million in financial expense as a result of the application to the Argentine companies of IAS 29 related to accounting for hyperinflationary economies. See note 4.2 of the consolidated financial statements for the year ended December 31, 2019 for more information;
- the effect of the recognition in 2018 of the reversal of impairment recognized on the financial receivable arising from the sale of 50% of Slovak Power Holding (€186 million);
- a reduction of €83 million in financial expense due to an increase in the capitalization of charges;
- an increase in interest expense on financing in the amount of €111 million. This reflected the increase in interest expense on bonds (€77 million) and financial expense from the application of IFRS 16 (€54 million);
- a decrease of €149 million in exchange rate losses, primarily reflecting developments in the exchange rates associated with net financial debt denominated in currencies other than the euro.