Note 17 – Participations in joint ventures

BE Group owns 50 percent of ArcelorMittal BE Group SSC AB (company registration number 556192-8770, domiciled in Karlstad, Sweden). The interest in the joint venture company is reported in the consolidated accounts using the equity method, by which 50 percent of profit after tax for the joint venture company will be reported as a share in earnings included in the consolidated operating result of BE Group.

Earnings in joint venture
ArcelorMittal BE Group SSC AB
2016 2015
Profit/loss before tax 19 4
Tax -4 -1
Profit after tax 15 3
Dividends received
Overview of income statements and balance sheets for the joint venture 2016 2015
Net sales 611 550
Operating result 19 4
Net financial items 0 0
Tax -4 -1
Profit/loss for the year 15 3
2016 2015
Non-current assets 183 165
Current assets 228 168
Total assets 411 333
2016 2015
Equity 267 252
Provisions 20 20
Interest-bearing liabilities 59 28
Other non-interest-bearing liabilities 65 33
Total equity and liabilities 411 333
Participations in joint ventures 2016 2015
Opening balance, cost 79 127
Dividends received
Share in earnings of joint venture 8 2
Other -50
Carrying amount at year-end 87 79
Transactions with joint venture
ArcelorMittal BE Group SSC AB
2016 2015
Receivables due from joint venture
Debts owed to joint venture 8 3
Sales to joint venture 0 0
Purchases from joint venture 57 57
Dividends received

Transactions with the joint venture are conducted at market prices and terms.

Impairment testing 2015

In the third quarter 2015, it was noted that the Group’s joint venture ArcelorMittal BE Group SSC AB would not achieve the targets for the year. In light of this, an assessment was done of the development for the upcoming years. It was concluded that an impairment requirement existed. Through BE Group Sverige AB, the Group is the owner of 50 percent of the shares in ArcelorMittal BE Group SSC AB and the value of the company’s proportion was tested by the recoverable amount being compared with the carrying amount. The carrying amount consists of the book value.

The recoverable amount was estimated using a value in use based on cash flow forecasts for five years forward and an end value based on an annual rate of growth of 2 percent. Cash flows was present value calculated with a discount rate of 14.5 percent before tax. The discount rate was determined based on the same methodology as in the testing of Goodwill (see Note 13) with the difference that the capital structure in joint ventures was used to weight together capital and interest expenses. The comparison between the carrying amount and the recoverable amount has entailed a write-down of the Group’s participations in the joint venture ArcelorMittal BE Group SSC with an amount of SEK 50 M. After write-down the remaining value is SEK 79 M.