Financial Risk Factors
The Group, by nature of its business and geographical positioning, is exposed to financial risks. The Group’s overall financial risk is managed by Group Finance and Treasury units, aiming to minimize the potential unfavorable impact arising from the markets’ fluctuations on Group’s financial performance. The Group does not engage in speculative transactions or transactions which are not related to its commercial, investing or borrowing activities.
a) Liquidity risk
The Group, in addition to its operating cash flows, maintains sufficient cash and other liquid assets, as well as extensive committed credit lines with several international banks to ensure the fulfilment of its financial obligations. Group Treasury controls Group funding as well as the management of liquid assets.
The table below summarizes the maturity profile of financial liabilities at 31 December 2016 and 2015 based on contractual undiscounted payments.
(all amounts in Euro thousands)
| |
Year ended 31 December 2016 |
Group
|
Less than 1 month |
1 to 6 months |
6 to 12 months |
1 to 5 years |
>5years |
Total |
| Borrowings |
100,579 |
36,979 |
20,891 |
848,027 |
31,172 |
1,037,648 |
| Other non-current liabilities |
- |
- |
- |
1,262 |
- |
1,262 |
| Trade and other payables |
162,378 |
63,798 |
4,276 |
- |
- |
230,452 |
| |
262,957 |
100,777 |
25,167 |
849,289 |
31,172 |
1,269,362 |
| |
Year ended 31 December 2015 |
| Borrowings |
29,097 |
5,545 |
22,100 |
794,435 |
20,182 |
871,359 |
| Derivative financial instruments (non-current) |
- |
- |
- |
924 |
- |
924 |
| Other non-current liabilities |
- |
- |
- |
1,505 |
8 |
1,513 |
| Trade and other payables |
165,416 |
62,554 |
4,937 |
- |
- |
232,907 |
| |
194,513 |
68,099 |
27,037 |
796,864 |
20,190 |
1,106,703 |
| |
Year ended 31 December 2016 |
Company
|
Less than 1 month |
1 to 6 months |
6 to 12 months |
1 to 5 years |
>5years |
Total |
| Borrowings |
46,881 |
3,340 |
5,846 |
341,721 |
- |
397,788 |
| Other non-current liabilities |
- |
- |
- |
142 |
- |
142 |
| Trade and other payables |
25,484 |
9,197 |
|
- |
- |
34,681 |
| |
72,365 |
12,537 |
5,846 |
341,863 |
- |
432,611 |
| |
Year ended 31 December 2015 |
| Borrowings |
16,267 |
1,472 |
8,355 |
325,945 |
- |
352,039 |
| Other non-current liabilities |
- |
- |
- |
138 |
8 |
146 |
| Trade and other payables |
28,264 |
6,139 |
156 |
- |
- |
34,559 |
| |
44,531 |
7,611 |
8,511 |
326,083 |
8 |
386,744 |
Borrowings include the floating and fixed rate outstanding principal at year-end plus accrued interest up to maturity.
The amounts that are described as "less than 1 month" are as usual on demand short-term uncommitted facilities plus interest accruals, and also including the €87.9 million outstanding Notes due 19 January 2017 plus coupon payments.
b) Market risk
Market risk comprises three main types of risk: currency risk, price risk, such as commodity risk and interest rate risk.
Group exposure to exchange rate (FX) risk derives from existing or expected cash flows denominated in currencies other than the Euro (imports / exports) and from international investments.
FX risks are managed using natural hedges, FX derivatives / swaps and FX forwards. Borrowings denominated in the same currency as the assets that are being financed and these create a natural hedge for investments in foreign subsidiaries exposed to FX conversion risk.
However, part of the financing of Group activities in the USA, Egypt and Albania, is in different currencies (Euro) than their functional ones. Their refinancing in local currencies along with fx hedging transactions are examined at regular intervals.