131
130
Annual Financial Statements
4.30.1 Market Risk
(i) Foreign Exchange Risk
The Group is activated in a global level and consequently is exposed
to foreign exchange risk emanating mainly from the US dollar. This
kind of risk mainly results from commercial transactions in foreign cur-
rency as well as net investments in foreign entities. For managing this
type of risk, the Group Treasury Department enters into derivative or
non derivative financial instruments with financial institutions on behalf
and in the name of group companies.
In Group level these financial instruments are characterized as ex-
change rate risk hedges for certain assets, liabilities or foreseen com-
mercial transactions.
(ii) Price Risk
The Group’s earnings are exposed to movements in the prices of the
commodities it produces, which are determined by the international
markets and the global demand and supply.
The Group is price risk from fluctuations in the prices of variables that
determine either the sales and/or the cost of sales of the group enti-
ties (i.e. products’ prices (LME), raw materials, other cost elements
etc.). The Group’s activities expose it to the fluctuations of the prices
of Aluminium (AL), Zinc (Zn), Lead (Pb) as well as to Fuel Oil as a pro-
duction cost.
Commodity price risk can be reduced through the negotiation of long
term contracts or through the use of financial derivatives.
(iii) Interest rate risk.
Group’s interest bearing assets comprises only of cash and cash
equivalents. Additionally, the Group maintains its total bank debt in
products of floating interest rate. In respect of its exposure to floating
interest payments, the Group evaluates the respective risks and where
deemed necessary considers the use of appropriate interest rate de-
rivatives. The policy of the Group is to minimize interest rate cash flow
risk exposures on long-term financing.
Effects and Sensitivity Analysis
The effects of the above risks at the Group’s
operating results, equity, and net profitabil-
ity are presented in the table below:
LME AL
(Aluminium)
$/t
+ 50 - 50
EBITDA
m.
€
7.3
-7.3
Net Profit
m.
€
7.3
-7.3
Equity
m.
€
7.3
-7.3
LME Pb (Lead)
$/t
+ 50 - 50
EBITDA
m.
€
0.1
-0.1
Net Profit
m.
€
0.1
-0.1
Equity
m.
€
0.1
-0.1
LME Zn (Zinc)
$/t
+ 50 - 50
EBITDA
m.
€
0.1
-0.1
Net Profit
m.
€
0.1
-0.1
Equity
m.
€
0.1
-0.1
Exchange Rate
€
/$
€
/$ - 0,05 + 0,05
EBITDA
m.
€
9.5
-9.5
Net Profit
m.
€
9.5
-9.5
Equity
m.
€
9.6
-9.6
BRENT
$/t
- 50 + 50
EBITDA
m.
€
0.3
-0.3
Net Profit
m.
€
0.3
-0.3
Equity
m.
€
0.3
-0.3
LNG Price
€
/MWh - 5
+ 5
EBITDA
m.
€
13.0 -13.0
Net Profit
m.
€
13.0 -13.0
Equity
m.
€
13.0 -13.0
It is noted that an increase of five (5) basis
points presume a decrease of 3.43 mil.
€
on net results and Equity.
The Group’s exposure in price risk and
therefore sensitivity may vary according to
the transaction volume and the price level.
However, the above sensitivity analysis is
representative for the Group exposure in
2014.
4.30.2 Credit Risk
The Group has no significant concentrations of credit risk with
any single counter party. Credit risk arises from cash and cash
equivalents, derivative financial instruments and deposits with
banks and financial institutions, as well as credit exposures to
wholesale customers.
Concerning trade accounts receivables, the Group is not ex-
posed to significant credit risks as they mainly consist of a
large, widespread customer base. However, the typical condi-
tions that dominate the Greek market and several other markets
in Europe are forcing the Group to constantly monitor its busi-
ness claims and also to adopt policies and practices to ensure
that such claims are collected. By way of example, such poli-
cies and practices include insuring credits where possible; pre-
collection of the value of product sold to a considerable degree;
safeguarding claims by collateral loans on
customer reserves; and receiving letters of
guarantee.
To minimize credit risk on cash reserves
and cash equivalents; in financial derivate
contracts; as well as other short term finan-
cial products, the Group specifies certain
limits to its exposure on each individual
financial institution and only engages in
transactions with creditworthy financial in-
stitutions of high credit rating.
The tables below summarize the maturity
profile of the Group’s financial assets as at
31.12.2014 and 31.12.2013 respectively:
MYTILINEOS GROUP
Past due but not impaired
Non past due but not
impaired
Total
(Amounts in thousands
€
)
0-3 months 3-6 months 6-12
months > 1 year
Liquidity Risk Analysis -
Trade Receivables
2014
37,270
8,761
2,413
130,854
227,720
407,018
2013
82,161
67,177
1,552
104,496
308,977
564,363
MYTILINEOS S.A.
Past due but not impaired
Non past due but not
impaired
Total
(Amounts in thousands
€
)
0-3 months 3-6 months 6-12
months > 1 year
Liquidity Risk Analysis -
Trade Receivables
2014
491
-
-
-
9,003
9,494
2013
200
46
-
-
139
385
4.30.3 Liquidity Risk
Liquidity risk is related with the Group’s need for the sufficient fi-
nancing of its operations and development. The relevant liquid-
ity requirements are the subject of management through the
meticulous monitoring of debts of long term financial liabilities
and also of payments made on a daily basis.
On 31/12/2014, the positive balance between Group’s Working
Capital and Short-Term Liabilities secures the adequate funding
of the Parent Company.
The Group ensures that there is sufficient
available credit facilities to be able to cover
its short-term business needs, after the
calculation of cash flows arising from the
operation as well as cash and cash equiva-
lents which are held. The funds for long-
term liquidity needs ensured by a sufficient
amount of loanable funds and the ability to
sell long-term financial assets.
The tables below summarize the maturity
profile of the Group’s financial liabilities as
at 31.12.2014 and 31.12.2013 respectively:
