110
111
Annual Financial Statements
4.29.2 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 exposed to significant credit risks as they mainly consist of a large,
widespread customer base. However, the atypical conditions that dominate the Greek market and several other markets in Eu-
rope are forcing the Group to constantly monitor its business claims and also to adopt policies and practices to ensure that such
claims are collected. By way of example, such policies 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 financial
products, the Group specifies certain limits to its exposure on each individual financial institution and only engages in transac-
tions with creditworthy financial institutions of high credit rating.
The tables below summarize the maturity profile of the Group’s financial assets as at 31.12.2015 and 31.12.2014 respectively:
4.29 Financial Risk Factors
The Group’s activities expose it to a variety of financial risks: market risk (includ-
ing foreign exchange risk and price risk), credit risk, liquidity risk, cash flow risk
and fair value interest-rate risk. The Group’s overall risk management program
focuses on the unpredictability of commodity and financial markets and seeks
to minimize potential adverse effects on the Group’s financial performance. The
Group uses derivative financial instruments to hedge the exposure to certain fi-
nancial risks.
Risk management is carried out by a central treasury department (Group Treas-
ury) under policies approved by the Board of Directors. Group Treasury operates
as a cost and service centre and provides services to all business units within the
Group, co-ordinates access to both domestic and international financial markets
and manages the financial risks relating to the Group’s operations. This includes
identifying, evaluating and if necessary, hedging financial risks in close co-oper-
ation with the various business units within the Group.
4.29.1 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 re-
sults from commercial transactions in foreign currency 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 institu-
tions on behalf and in the name of group companies.
In Group level these financial instruments are characterized as exchange rate risk
hedges for certain assets, liabilities or foreseen commercial transactions.
(ii) Price Risk
The Group’s earnings are exposed to movements in the prices of the commodi-
ties 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 entities (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 production cost.
Commodity price risk can be reduced through the negotiation of long term con-
tracts 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 in-
terest 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 derivatives. The policy of the Group is to minimize
interest rate cash flow risk exposures on long-term financing.
MYTILINEOS GROUP
MYTILINEOS S.A.
(Amounts in thousands
€
)
31/12/2015
31/12/2014
31/12/2015
31/12/2014
Until 1 year
3,380
3,028
292
265
1 to 5 years
11,824
10,945
1,014
1,006
> 5 years
12,733
14,433
332
349
Total Operating Lease
27,936
28,407
1,639
1,621
4.28 Operating Leases
Effects and Sensitivity Analysis
The effects of the above risks at the Group’s operat-
ing results, equity, and net profitability are presented
in the table below:
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.
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
2015
51,398
15,765
3,301
31,588
367,963
470,014
2014
37,270
8,761
2,413
130,854
227,720
407,018
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
2015
-
85
-
-
-
85
2014
491
-
-
-
9,003
9,494
