Page 93 - KELAG Annual Report 2017
P. 93

The structure of financial liabilities means that the interest rate risk is currently low. The share of
                                      variable-rate debt amounts to 6.54% of total borrowed capital (prior year: 8.49%). Most of the
                                      financing portfolio  has  a  fixed  interest rate  and  as  a  result is  not  subject to  any  fluctuations
                                      affecting cash. The variable interest rate share is continuously monitored and for risk reasons is
                                      limited to 40% at Group level. An interest rate increase of 1% for variable-rate financial liabilities
                                      as of the reporting date would reduce the financial result by EUR 0.3m (prior year: EUR 0.4m) p.a.
                                      An interest rate decrease of 1% for variable-rate financial liabilities as of the reporting date would
                                      increase the financial result by EUR 0.3m (prior year: EUR 0.4m) p.a. The KELAG Group is financed
                                      with  an  average  effective  interest  rate  of  2.76%  (prior  year:  2.72%). The  equivalent  nominal
                                      interest rate is 2.72% (prior year: 2.70%). A change of +1% affects the market value of the interest
                                      hedging instrument by EUR 0.3m (prior year: EUR 0.5m), whereas a change of -1% would have an
                                      effect of EUR -0.3m (prior year: EUR -0.5m).





                                      The Group Finance Framework Directive stipulates that only transactions in euros are approved
                                      for the fully consolidated group entities with their registered offices in Austria. KELAG’s scope of
                                      consolidation at year-end includes no financial liabilities in foreign currency and for this reason
                                      the foreign currency risk is of little importance. Because of the limited assets in foreign currency
                                      (3.87% of total assets in 2017 and 3.93% of total assets in 2016), the currency translation risk for
                                      goodwill and assets is also negligible.






                                      The market price level is a factor influencing the electricity price. Risks are minimised based on a
                                      long-term sales strategy.






                                      The  KELAG  Group  operates  as  an  international  energy  supplier  in  an  increasingly  complex
                                      environment.  The  risk-averse  financial  strategy  of  the  KELAG  Group  that  is  geared  toward
                                      continuity and yet adjusted to the varied challenges of day-to-day business has shown its worth
                                      in the current unstable environment. In the area of financial management, guidelines serve as a
                                      basis for carrying out business and set out binding and stringent risk measures, responsibilities
                                      and controls.
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