AFD - 2018 Registration document

FINANCIAL INFORMATION

Economic presentation of the consolidated financial statements

COST OF RISK The cost of risk changed significantly in comparison with the previous financial year. It represented an expense of €67M compared with €12M in 2017 and breaks down as follows:

2017

Change

2018

Cost of risk

AFD

-62

7

-69

Proparco

-6

-19

13

Fisea

0 0 1 0

0 0

0 0 1 0

Soderag Sogefom

-1

Other subsidiaries GROUP TOTAL

0

-67

-12

-55

ORDINARY INCOME BEFORE TAX Following the disposal of equity investments held in the SIDOMs during the 2017 financial year, the gains on other assets item decreased by €12M, including the capital loss of €13M recorded on the disposal of Simar, an equity-accounted company in AFD Group’s consolidated financial statements. The share of equity-accounted companies (1) (€5M) is stable over the period. Ordinary income before tax was consequently €151M in 2018 (compared with €347M in 2017). NET INCOME Taking account of corporate tax (€13M) and the interests of minority shareholders in Proparco, Propasia and Sogefom (€22M), net profit, group share totalled €115M.

The increase in cost of risk during the year is mainly due to the extraordinary write-off of €48.5M from 2017, following refinements to the method used to recognise provisions for Proparco sub-holdings. Note that before the impact of the refinements, cost of risk is close to its normal level. The initial application of IFRS 9 on 1 January 2018 was recorded in shareholders’ equity and materialised as a reversal of

impairments for +€134M. OPERATING INCOME

The reduction in gross operating income (-€154M) and the negative impact of the rise in the cost of risk led to operating income of €146M, down €209M compared with 2017.

5

(1) Corresponds to the share of earnings from the equity-accounted companies in the Group’s consolidated financial statements.

97

REGISTRATION DOCUMENT 2018