26
27
Annual Board of Directors Management Report
It must be noted that the above table does not include liabilities to
clients from the performance of construction projects, as the maturity
of such values cannot be assessed.
Moreover, cash-advances from customers, construction contacts li-
abilities as well as the provisions and accrued expenses are not in-
cluded.
Capital Control imposition in Greece
The Greek government and the Institutions, after almost five months
of negotiations, failed to reach an agreement until the extended Greek
program expired on the 30th of June 2015. During said period a con-
tinuous and escalated leak of bank deposits occurred as a result of
the increasing uncertainty. Said fact, along with the decision of the Eu-
ropean Central Bank (ECB) for no further increase in the Emergency
Liquidity Assistance (ELA), led to the Legislative Act (L.A.) of the 28th
of July 2015 that introduced the impose of capital controls along with
a Bank holiday period. With a later L.A. on the 18th of July 2015, the
Greek government decided the termination of the Bank holiday, but
retained the measure of capital controls.
The Group monitored and still does said developments very close-
ly, taking every necessary measure to safeguard its going concern.
Through the strength of its international profile and export orientation,
the Group copes with existing difficulties, supports the liquidity of the
Greek system and achieves a smooth and normal operation for all its
sectors of activity.
Market Risk
Price Risk
Goods prices that are mainly determined by international markets and
global offer and demand result in the Group’s exposure to the relevant
prices fluctuation risk.
Goods’ prices are connected both to variables that determine rev-
enues (e.g. metal prices at LME) and to the cost (e.g. natural gas
prices) of the Group’s companies. Due to its activity, the Group is
exposed to price fluctuation of aluminium (AL), zinc (Zn), lead (Pb) as
well as to price fluctuation of natural gas, as production cost.
As regards price fluctuation of metals, the Group’s
policy is to minimize risk by using financial derivative
instruments.
Exchange rate risk
The Group develops activity at international level
and is therefore exposed to exchange rate risk that
arises mainly from the US dollar. Such risk primar-
ily stems from commercial transactions in foreign
currency as well as from net investments in foreign
financial entities. For the management of such risk,
the Group’s Financial Management Department
establishes financial derivative and non-derivative
instruments with financial organizations for the ac-
count and in the name of the Group’s companies.
At the Group level, such financial instruments are
considered to constitute compensation means for
the exchange rate risk of specific assets, liabilities
or future commercial transactions
Interest rate risk
The Group’s assets that are exposed to interest rate
fluctuation primarily concern cash and cash equiva-
lents. The Group’s policy as regards financial assets
is to invest its cash in floated interest rates so as
to maintain the necessary liquidity while achieving
satisfactory return for its shareholders. In addition,
for the totality of its bank borrowing, the Group uses
floating interest rate instruments. Depending on the
level of liabilities in floating interest rate, the Group
proceeds to the assessment of interest rate risk and
when necessary examines the necessity to use in-
terest bearing financial derivative instruments. The
Group’s policy consists in minimizing its exposure
to interest bearing cash flow risk as regards long-
term funding.
Effect from risk factors and sensitivities
analysis
The effect from the above mentioned factors to
Group’s operating results, equity and net results
presented in the following table:
MYTILINEOS GROUP
Liquidity Risk Analysis - Liabilities
(Amounts in thousands
€
)
2015
up to 6 months 6 to 12 months 1 to 5 years after 5 years
Total
Long Term Loans
-
20,335
346,452
56,255
423,043
Short Term Loans
41,583
104,105
1,251
526
147,465
Trade and other payables
301,744
16,273
62,609
-
380,627
Other payables
(296,205)
362,073
850
-
66,718
Current portion of non - current liabilities
29,910
134,248
-
-
164,157
Total
77,031
637,034
411,163
56,782
1,182,010
MYTILINEOS GROUP
Liquidity Risk Analysis - Liabilities
(Amounts in thousands
€
)
2014
up to 6 months 6 to 12 months 1 to 5 years after 5 years
Total
Long Term Loans
74
7,432
413,688
102,828
524,023
Short Term Loans
28,084
92,664
-
-
120,748
Trade and other payables
234,917
33,388
24,906
-
293,212
Other payables
(202,703)
251,552
58
-
48,907
Current portion of non - current liabilities
-
42,090
-
-
42,090
Total
60,373
427,126
438,653
102,828
1,028,980
MYTILINEOS S.A.
Liquidity Risk Analysis - Liabilities
(Amounts in thousands
€
)
2015
up to 6 months 6 to 12 months 1 to 5 years after 5 years
Total
Long Term Loans
-
17,245
-
-
17,245
Trade and other payables
4,411
-
13,583
-
17,994
Other payables
2,299
116,913
-
-
119,212
Current portion of non - current liabilities
3,450
3,680
-
-
7,130
Total
10,160
137,838
13,583
-
161,581
MYTILINEOS S.A.
Liquidity Risk Analysis - Liabilities
(Amounts in thousands
€
)
2014
up to 6 months 6 to 12 months 1 to 5 years after 5 years
Total
Long Term Loans
-
7,432
144,549
-
151,981
Short Term Loans
-
3,832
-
-
3,832
Trade and other payables
4,294
-
11,061
-
15,355
Other payables
250
125,064
-
-
125,314
Current portion of non - current liabilities
-
9,167
-
-
9,167
Total
4,544
145,494
155,610
-
305,649
Solvency Risk
The solvency risk is linked to the need to sufficiently finance the Group’s activity and growth. The relevant solvency requirements are the sub-
ject of management through the meticulous monitoring of debts of long term financial liabilities and also of payments made on a daily basis.
On 31/12/2015, the positive balance between Group’s Working Capital and Short-Term Liabilities secures the adequate funding of the Par-
ent Company.
The Group ensures the provision of adequate credit facilities available so as to cover short term business requirements. In addition, funds
for long term solvency needs shall be ensured through an adequate amount of borrowed capital and the ability of selling long term financial
assets.
The tables below summarize the maturity profile of the Group’s liabilities as at 31.12.2015 and 31.12.2014 respectively:
LME AL (Aluminium) $/t
+ 50
- 50
EBITDA
m.
€
9.0
-9.0
Net Profit
m.
€
9.0
-9.0
Equity
m.
€
9.0
-9.0
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.
€
15.9
-15.9
Net Profit
m.
€
15.9
-15.9
Equity
m.
€
15.6
-15.6
BRENT $/t
- 50
+ 50
EBITDA
m.
€
0.3
-0.3
Net Profit
m.
€
0.3
-0.3
Equity
m.
€
0.3
-0.3
NG Price
€
/MWh - 5
+ 5
EBITDA
m.
€
9.0
-9.0
Net Profit
m.
€
9.0
-9.0
Equity
m.
€
9.0
-9.0
It is noted that an increase of five (5) basis points presume a decrease of 3.53 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 2015.
