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Note 22. Investments accounted for using the equity method

Investments accounted for using the equity method comprise the following:

Carrying amounts of investments accounted for using the equity method
EUR '000

 

31/12/2021

31/12/2020

EQUI-Fibres Beteiligungs­gesellschaft mbH (EFB)

4,777

4,137

Hygiene Austria LP GmbH (HGA)

0

4,536

LD Florestal S.A. (LDF)

15,092

15,595

Other associates

4,853

4,714

Other joint ventures

117

105

Total

24,840

29,088

The major investments accounted for using the equity method include, in particular, the investments in EQUI-Fibres Beteiligungsgesellschaft mbH (EFB), Kelheim, Germany, which is assigned to the Segment Division Fiber, and LD Florestal S.A. (LDF), Sao Paulo, Brazil, which is assigned to the Segment Division Pulp. For the strategic importance of the other investments accounted for using the equity method and their relationship with the Lenzing Group see note 40.

Investments accounted for using the equity method developed as follows:

Development of the carrying amounts of investments accounted for using the equity method
EUR '000

2021

EFB

Other associates

HGA

LDF

Other joint ventures

Total

As at 01/01

4,137

4,714

4,536

15,595

106

29,088

Capital injection

0

0

0

0

0

0

Share in profit or loss of investments accounted for using the equity method

785

663

0

(461)

8

995

Other comprehensive income – remeasurement of defined benefit liability and other

105

0

0

0

0

105

Other comprehensive income – foreign currency translation differences arising during the year

0

116

0

(41)

3

79

Disposal of carrying amount

0

0

(4,536)

0

0

(4,536)

Distributions

(250)

(640)

0

0

0

(890)

As at 31/12

4,777

4,853

0

15,092

117

24,840

Development of the carrying amounts of investments accounted for using the equity method (previous year)
EUR '000

2020

EFB

Other associates

HGA

LDF

Other joint ventures

Total

As at 01/01

2,250

4,936

0

21,929

100

29,215

Capital injection

0

0

1,670

0

0

1,670

Share in profit or loss of investments accounted for using the equity method

1,993

8

2,867

49

7

4,924

Other comprehensive income – remeasurement of defined benefit liability and other

(106)

0

0

0

0

(106)

Other comprehensive income – foreign currency translation differences arising during the year

0

(189)

0

(6,384)

(2)

(6,574)

Disposal of carrying amount

0

0

0

0

0

0

Distributions

0

(40)

0

0

0

(40)

As at 31/12

4,137

4,714

4,536

15,595

106

29,088

In March 2021, the interest in the joint venture Hygiene Austria LP GmbH, Wiener Neudorf, Austria, which was previously accounted for using the equity method, was divested. The disposal led to the deconsolidation of the interest. The divestiture incurred a loss of EUR 4,536 thousand. A cash purchase price of EUR 1 was paid. Additionally, a long-term performance-related purchase price component was agreed (earn-out). This earn-out depends on the company’s future profitability and was set at EUR 0 thousand as at December 31, 2021. The loan granted to Hygiene Austria LP GmbH in the 2020 financial year was waived as part of the divestiture and a loss of EUR 2,000 thousand was recognized (see note 40). The Lenzing Group held 50.1 percent of the capital and voting rights of HGA as at December 31, 2020. The main activity of HGA, which is not publicly listed, was the production and sale of protective masks, in particular mouth-nose protective masks as well as FFP2 masks.

In the 2021 financial year, an impairment of EUR 0 thousand (2020: EUR 1,384 thousand) was recognized on the outstanding purchase price receivables and non-current loans due from the buyer of EFB (and its subsidiaries) (see note 39, credit risk). The carrying amounts of the outstanding purchase price receivables and non-current loans due from the buyer of EFB (and its subsidiaries) total EUR 10,678 thousand as at December 31, 2021 (December 31, 2020: EUR 10,678 thousand) and are reported under financial assets. They carry standard bank interest rates.

The Lenzing Group holds a lien on the remaining shares of EFB. In addition, there is a non-current earnings-related component of the purchase price, which is dependent on the company’s future business development and is reported under other non-current assets at the discounted present value of EUR 4,087 thousand as at December 31, 2021 (December 31, 2020: EUR 4,087). Moreover, the buyer was granted a credit line of up to EUR 5,379 (December 31, 2020: EUR 8,622 thousand), which can be utilized up to December 31, 2025 at the latest in the event of adverse changes in the framework conditions for EFB on the market. The credit line had not been used as at December 31, 2021 and in the previous year as at December 31, 2020.

The Lenzing Group held 20 percent of capital and voting rights as at December 31, 2021 (December 31, 2020: 20 percent). The core business of EFB, which is not publicly listed, is the production and marketing of wood-based cellulosic fibers. The relations between the Lenzing Group and this company are described in note 40.

The following table provides summarized financial information on EFB in accordance with IFRS (100 percent):

Summarized financial information on EFB
EUR '000

 

31/12/2021

31/12/2020

Non-current assets

127,871

116,958

Current assets

81,282

67,628

Equity

61,336

58,137

Non-current liabilities

54,513

55,976

Current liabilities

93,303

70,474

 

 

 

 

 

 

 

2021

2020

Revenue

151,231

127,610

Earnings before tax (EBT)

6,044

12,759

Total comprehensive income

4,450

9,434

Thereof net profit for the year

3,926

9,964

Thereof other comprehensive income

523

(531)

The reconciliation of equity to the carrying amount of the investment in EFB is as follows:

Reconciliation of equity to carrying amount of the investment in EFB
EUR '000

 

31/12/2021

31/12/2020

Equity

61,336

58,137

Thereof:

 

 

Group’s interest (20 %; previous year: 20 %)

12,267

11,627

Consolidation and other effects

(63)

(63)

Impairment

(7,427)

(7,427)

Carrying amount

4,777

4,137

The Lenzing Group held 50 percent of the capital and voting rights in LDF as at December 31, 2021 (December 31, 2020: 50 percent). The core business of LDF, which is not publicly listed, is granting rights of use. The relations between the Lenzing Group and this company are described in note 40.

The following table provides summarized financial information on LDF in accordance with IFRS (100 percent):

Summarized financial information on LDF
EUR '000

 

31/12/2021

31/12/2020

Non-current assets

78,404

73,344

Current assets

5,545

2,840

Equity

30,185

31,190

Non-current liabilities

51,647

43,941

Current liabilities

2,117

1,053

 

 

 

 

 

 

 

2021

2020

Revenue1

4,946

5,041

Earnings before tax (EBT)

922

103

Total comprehensive income

922

103

Thereof net profit for the year

922

103

Thereof other comprehensive income

0

0

1)

LDF's revenue consists of rental income in particular.

The reconciliation of equity to the carrying amount of the investment in LDF is as follows:

Reconciliation of equity to carrying amount of the investment in LDF
EUR '000

 

31/12/2021

31/12/2020

Equity

30,185

31,190

Thereof:

 

 

Group’s interest (50 %; previous year: 50 %)

15,092

15,595

Carrying amount

15,092

15,595

The investments in associates represent shares in companies in which the Lenzing Group can exert significant influence over financial and operating policies. Joint ventures are joint arrangements managed by the Lenzing Group together with one or more partners, whereby the Lenzing Group has rights to the net assets of the arrangement.

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