Page 175 - KELAG Annual Report 2019
P. 175

The effects on earnings and equity of potential price fluctuations on the electricity or gas market
           are measured using sensitivity analyses.

                                         Earnings               Earnings
            in EUR m                    after taxes   Equity   after taxes   Equity
            Electricity                     -2.5        -7.9        2.5        7.9
            Gas                             -0.1        2.2         0.1       -2.2

           A uniform group tax rate of 25% was assumed for the effect on earnings after taxes. In addition to
           the sensitivity of the profit  for the period, the sensitivity from the cash flow hedges in other
           comprehensive income also has an effect on the sensitivity of equity.

           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 2019, Standard & Poor’s confirmed KELAG’s A/stable 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.

           Interest  rate  and  currency  risks  are  minimised  by  an  internal  control  system  for  all  financial
           products used. 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 2019, there are no indications of any further financial risks for the financial year
           2019 that could significantly impact the business development of the KELAG Group in a negative
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