Page 100 - Annual Report KELAG Group 2018
P. 100

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  towards
           continuity but still 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.

           In 2018, 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, although the KELAG Group
           mainly does business with counterparties with investment grade ratings, i.e., a low default risk.

           As of 31 December 2018, there are no indications of any further financial risks for the financial year
           2018 that could significantly impact the business development of the KELAG Group in a negative
           way.





           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 amounted to
           EUR 893.7m  as  of  the  reporting  date  (prior  year:  EUR 855.5m).  Financial  liabilities  came  to
           EUR 701.8m (prior year: EUR 678.1m); cash and cash equivalents came to EUR 134.7m (prior year:
           EUR 160.8m). The Group monitors its capital using net gearing, which is the ratio of net debt to
           total equity.
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