Lundin's Profitability Affected by FX Loss, Financing Fees
Swedish oil producer Lundin Petroleum said Wednesday that its profitability for the second quarter of 2016 will be adversely affected by a net foreign exchange loss of $64 million related to the revaluation of loan balances as well as capitalized financing fees of $22 million. Lundin added that these items would have no impact on the reported operating cash flow or EBITDA for the period.
The foreign exchange loss came about because the Norwegian krone and euro weakened against the US dollar by approximately one percent and two percent respectively during 2Q 2016.
Meanwhile, the capitalized financing fees of $22 million relate to the unamortized portion of the capitalized financing fees in establishing previous financing facilities to the company's refinancing during the first half of 2016. This charge will be partly offset by a deferred tax credit of $11 million, which will also be recognized in the income statement for 2Q 2016, the firm said.
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