A/S Femern Landanlæg has received money in the coffers. This appears from the company’s annual report for 2022, which has just been published.
The company A/S Femern Landanlæg was founded as a subsidiary of the Danish state holding company Sund & Bælt. It is A/S Femern Landanlæg that owns all shares in Femern A/S. Femern A/S is the state’s developer company responsible for the Femern connection.
No income before tunnel opening
At first glance, it may seem strange that a company that is working on the largest construction project in Danish history can make any money at all. The Fehmarn connection is to be financed by the cars and trains that run through the tunnel. Naturally, there are not that many of them before the tunnel is opened.
When A/S Femern Landanlæg can nevertheless record a profit on ordinary operations of over a quarter of a billion kroner (234.2 million), it is due to a very special trick: Femern A/S must pay a so-called guarantee commission of 1.85 percent to A/S Femern Landanlæg for the government loans and loans with a government guarantee that the developer takes out to finance the tunnel project.
Guarantee commission after Scandlines complaint
The guarantee commission is an outgrowth of a complaint filed by the ferry company Scandlines over state aid to the Femernbyggeriet.
The European Commission determined in 2020 that Femern A/S may take out government loans and loans with a government guarantee for a total of DKK 69.3 billion. The decision also states that the loans must be repaid and the state aid settled no later than 16 years after the tunnel is put into use.
The European Commission also ordered Femern A/S to pay a commission of a total of two percent for loans with a state guarantee and for state re-lending. A/S Femern Landanlæg collects the commission of the two percent from Femern A/S. A/S Femern Landanlæg then pays the generally applicable commission of 0.15 for the loans, so that the overall commission is 1.85 percent.
Fair value adjustments for DKK 2.2 billion
In addition to DKK 310 million from this commission and interest income, fair value adjustments amount to an income of almost DKK 2.2 billion in 2022. A/S Femern Landanlæg will thus come out of 2022 with a profit of DKK 2.4 billion. Fair value adjustments are an accounting technical item that comes from the current valuation of, for example, fixed assets. And there have been quite a few more of them in the past year, shows the annual report from A/S Femern Landanlæg.
Money on the account again
With the positive result for 2022, the equity is now positive again for A/S Landanlæg, which has a total of just over 1.2 billion in the account. At the last financial statement, A/S Femern Landanlæg had a negative equity of just over half a billion kroner.
