Financial result, result before taxes and cash flow
A brief presentation of the financial result (excluding at equity consolidated companies) is included in Note 29 “Financial result” of the notes to the consolidated financial statements.
VIG generated a financial result (incl. the result from at-equity consolidated companies) of EUR 958.81 million in 2016. This was a 7.8% year-on-year decrease that was mainly due to lower realised gains on the disposal of investments in bonds, loans and equities.
Result before taxes
Group profit before taxes rose to EUR 406.73 million in 2016 (2015: EUR 47.06 million). This more than achieved the target of at least doubling the profit of the previous year, in spite of the negative effects of the low interest rate environment. The financial result includes a one-time positive effect due to the agreement reached between the Carinthian Compensation Payment Fund and HETA creditors, which included VIG. Accepting the settlement before the 7 October 2016 deadline meant that the bonds that had been previously written off could be written up in value by around EUR 40 million.
Romania, Hungary and Bulgaria recorded particularly large increases in profits.
The cash flow from operating activities rose from EUR 1,118.61 million in 2015 to EUR 1,132.66 million in 2016. The cash flow from investing activities increased to EUR -693.01 million in 2016 (2015: EUR -887.67 million), primarily due to the decrease in the single-premium life insurance portfolio. Vienna Insurance Group’s financing activeities in 2016 generated a cash flow of EUR -110.07 million (2015: EUR 91.73 million). The year-on-year decrease was mainly the result of the subordinated liability of EUR 400 million issued in 2015. At the end of 2016, the Group had cash and cash equivalents equal to EUR 1,589.94 million (2015: EUR 1,101.21 million). Vienna Insurance Group received a total of EUR 908.43 million in interest and dividends in 2016 (2015: EUR 950.65 million).