Annual report 2019

120

Exposure to credit risk Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. Credit risk arises principally from the Group’s unbilled revenue, trade and other receivables. The Group’s exposure to credit risk is mainly determined by the characteristics and location of each individual customer. A large part of the Group’s contracting activities within the Dredging & Inland Infra and Offshore Energy operational segments is directly or indirectly performed on behalf of state-controlled authorities and oil and gas producers (or contractors thereof) in various countries and geographical areas. Salvage receivables (part of Towage & Salvage) are mainly outstanding with shipping companies and their Protection & Indemnity Associations (or ‘P&I clubs’). The creditworthiness of new customers is individually analyzed before payment and delivery terms and conditions are offered. The same applies for contracting activities with clients the Group has done business with previously, even if business has been done for many years. The Group’s review may include external credit ratings, if available, and bank references. Customers that fail to meet the Group’s creditworthiness criteria may only transact with the Group on the basis of adequate credit insurance, prepayment or a bank guarantee. In general there is a healthy diversification of receivables from different customers in several countries in which the Group performs its activities. Ongoing credit assessments are performed on the financial condition of accounts receivable. The credit history of the Group over recent years indicates that credit losses are insignificant compared to the level of activity. Therefore, management is of the opinion that credit risk is adequately controlled by the currently applicable procedures. The maximum credit risk as at the balance sheet date, without taking into account the aforementioned financial risk coverage policy and instruments, consists of the carrying amounts of the financial assets as stated below.

31 DECEMBER 2019

2018

Other non-current receivables

1,377

9,214

Trade receivables

330,324 27,143 307,140

378,489

Amounts due from joint ventures and associates

5,927

ANNUAL REPORT 2019 – BOSKALIS FINANCIAL STATEMENTS 2019 L 9 -- BOSKALIS FINANCIAL STATEMENTS 2019 Other receivables and prepayments Derivatives Income tax receivable Cash and cash equivalents Dredging & Inland Infra Offshore Energy Towage & Salvage Holding & Eliminations

317,796

6,367

9,290

19,457 336,207

23,502 399,574

1,028,015

1,143,792

The maximum credit risk on trade receivables by operational segment was as follows as at the reporting date:

31 DECEMBER 2019

2018

198,924 97,465 29,119

205,466 21,785 147,907

4,816

3,331

330,324

378,489