Finance result vs. net profit

Hi, could somebody please explain the term finance result. I know there is a rather simple explanation – but at the moment I can’t quite understand why you can have a positive net profit while your finance result is negative. Here is the text:

[i]Recording a consolidated net profit (after minority interests) of EUR 5.1 million, PC-WARE managed to lift its bottom-line result by 14.4% year on year, despite a negative finance result.

Depreciation and amortisation fell by 6.9 % year on year, thus resulting in a rise in earnings before interest and taxes (and minority interests) (EBIT) by 39.1 % to the record level of ?9.6 million. Earnings before taxes (and minority interests) (EBT), receded by 6.6 % year on year to ?7.7 million as a result of a negative finance result of minus ?1.96 million.[/i][YSaerTTEW443543]

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No idea really, Torsten, but it seems to have something to do with the foreign exchange effect on corporate financing:

“[i]One-time negative finance result – Securities position reduced substantially

A strengthening Swiss Franc and a reduction in the value of the company’s portfolio of marketable securities resulted in a negative finance result in Q2 of CHF -4.9 million (Q1: +0.4 million, half-year: -4.5 million). To minimize any future exposure to such risks, the company has substantially reduced both its deposits in USD and its holdings in marketable securities[/i]."

Interestingly, googling for ‘negative finance result’ turns up some pages, but ‘positive finance result’ locates no pages at all. Must be a bad year.

Hi Torsten,

“Finance result” is just an overly direct translation of the German word Finanzergebnis. In English it should be “financial results”. Hard though it may be to believe, googling “positive financial results” locates thousands of pages. Just one more example of what can happen in translation (and afterwards). :lol:

Unfortunately, I also don’t know much about how corporate number crunchers figure and report things. But I have heard they’re quite creative sometimes. :lol:


Hi Amy,

The interesting thing with that translation is that I do think it was made by an English speaker. Strangely enough though they use the term finance result which sounds very German indeed.[YSaerTTEW443543]

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Hi Torsten

That doesn’t really surprise me. Since I also do translations, I know how hard it can get when you are expected to know specialist vocabulary for everything under the sun. And it’s often the case that the original language “haunts” you all the way through the translation. That raises the probablilty of overly direct translations. In addition, some things simply don’t translate well — due to differing systems, laws, culture, etc. But, I’m sure you know all this.

Seeing as I’m not a financial expert, my assessment that “finance result” is an overly direct translation might be wrong. That’s possible. But a quick Google search shows that a “finance result” seems to be found mainly in German-speaking countries. That sounds suspicious.

There’s a translating program on my PC and I’ve just asked it to translate “Finanzergebnis”. It tells me “finance-result”. Hmmm… A nice direct translation. Although I don’t think it’s correct, it also isn’t bad. My program has given me much more entertaining translations. When the program was brand new, I tested it out on part of translation I was doing for the security department of a large company. The translation for the words “Schl?ssel und Schl?sser” was quite accurate, but nevertheless wrong: “locks and palaces”. :lol: Even funnier than that was that it also translated the security manager’s first name: “Andreas” became “other ace”. :lol: