4.3.9Net Financing Costs
2025 | 2024 | ||
|---|---|---|---|
Interest income on loans & receivables | 0 | 2 | |
Interest income on cash and short-term investments | 41 | 24 | |
Net foreign exchange gain | 34 | - | |
Net cash flow hedges ineffectiveness | 5 | - | |
Other financial income | 2 | 1 | |
Financial income | 83 | 26 | |
Interest expenses on financial liabilities at amortized cost | (740) | (832) | |
Interest income / (expenses) on hedging derivatives | 105 | 167 | |
Interest expenses on lease liabilities | (5) | (5) | |
Interest addition to provisions | (13) | (10) | |
Net cash flow hedges ineffectiveness | - | (3) | |
Net foreign exchange loss | (0) | (8) | |
Financial expenses | (653) | (690) | |
Net financing costs | (571) | (663) |
The decrease in net financing costs is mainly due to (i) the full repayment of the project loans for FPSOs Liza Destiny and Prosperity in 2024 following the purchase of the units by the client, (ii) gains on forward currency contracts, (iii) higher interest income on cash and short-term investments, (iv) the scheduled amortization of project loans for the fleet under operations, and (v) lower interest expense on the Company’s RCF. This was partially offset by (vi) the new construction financing for FPSO Jaguar in 2025, (vii) the sale and leaseback financing agreement for FPSO Cidade de Paraty, (viii) increased financing to fund the construction of FPSO Almirante Tamandaré, FPSO Alexandre de Gusmão and FPSO ONE GUYANA during the period and (ix) the amortization of the ONE GUYANA project financing transaction costs up to the expected purchase of the unit in early 2026.