Page 94 - KELAG Annual Report 2017
P. 94

In 2017, Standard & Poor’s confirmed KELAG’s “A” rating, giving the Group a leading position in
           both a national and an international comparison. The basic  prerequisites for maintaining this
           position include commitment to a capital structure that is stable and robust in the long term,
           compliance with the main KPIs relevant for the rating and regular and intensive communication
           and discussion of the Group’s strategic objectives with the rating agency.

           The  fully  consolidated  subsidiaries  of  the  KELAG  Group  generally  do  not  hold  any  derivative
           financial instruments. Exceptions to this rule are those instruments related to trading and one
           interest hedging instrument.

           Interest  rate  and  currency  risks  are  minimised  by  an  internal  control  system  for  all  financial
           products  used.  It  is  not  permissible  to  use  derivatives  for  speculative  purposes.  The  risk  of
           counterparty default is reduced by written guidelines. Transactions with counterparties are only
           concluded in the amount approved for their respective credit rating.

           As of 31 December 2017, there are no indications of any further financial risks for the financial year
           2017 that could significantly impact negatively on the business development of the KELAG Group.

           The objective of capital management is to maintain a strong capital base, to successfully continue
           the organic growth and innovation strategy based on renewable energies and thus to promote
           the Group’s future development.

           For management, the Group’s capital is its equity reported pursuant to IFRSs. Equity came to
           EUR 855.5m  as  of  the  reporting  date  (prior  year:  EUR 817.2m).  Financial  liabilities  came  to
           EUR 678.1m (prior year: EUR 694.2m); cash and cash equivalents came to EUR 160.8m (prior year:
           EUR 167.5m). The Group monitors its capital using net gearing, which is the ratio of net debt to
           total equity.

           With  a  net  gearing  ratio  of  57.5%  (prior  year:  61.3%)  based  on  financial  liabilities  as  of  the
           reporting date, the KELAG Group has a stable capital structure.
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