6.3 Investments in associated companies
The table below summarizes the development of investments in associated companies:
CHF million | 2023 | 2024 |
---|---|---|
Investments in associated companies at January 1 | 16.7 | 18.8 |
Share in profit/loss | 3.1 | 2.9 |
Dividends received | – 0.5 | – 1.6 |
Change in scope of consolidation | – | – 5.9 |
Currency translation differences | – 0.5 | 0.1 |
Investments in associated companies at December 31 | 18.8 | 14.3 |
Rieter holds 25 percent of the share capital and the voting rights of Electro-Jet S.L. based in Gurb (Spain). Until October 31, 2024, investments in associated companies also included the investment of 49 percent in Prosino S.r.l. incorporated in Borgosesia (Italy). On November 1, 2024, Rieter increased its interest in voting rights in Prosino S.r.l. (Borgosesia, Italy) from 49 to 60 percent, changing from equity accounting to full consolidation. As a consequence of the change to full consolidation, the existing investment of 49 percent has been revalued at a fair value of CHF 9.2 million, resulting in a gain of CHF 3.3 million. The revaluation gain on the existing investment is presented in the consolidated income statement in other income (see note 3.3). Aside from the revaluation gain, the effects of the associated companies on the consolidated financial statements are insignificant.
The recognized share in profit or loss of associated companies has been reclassified from financial result to the operating result (see note 1.3).
In 2024, Rieter purchased products from associated companies with a total value of CHF 14.1 million (2023: CHF 35.5 million). The respective open trade payable balances at December 31, 2024, were interest free and amounted to CHF 0.1 million (December 31, 2023: CHF 2.4 million). In addition, Rieter sold products to associated companies with a total value of CHF 0.1 million in 2024 (2023: CHF 0.6 million). At December 31, 2024, Rieter had no open trade receivables out of these sales.
Rieter’s total share in profit of individually immaterial associated companies resulted from continuing operations. The share in other comprehensive income was insignificant.
Material accounting policies
Associated companies are entities over which Rieter has significant influence, generally through a shareholding of between 20 and 50 percent of the voting rights. Investments in associates are accounted for using the equity method of accounting. Under the equity method, the investment is initially recognized at cost, and the carrying amount is increased or decreased to recognize Rieter’s share in profit or loss of associated companies after the date of acquisition.