Annual report 2019

121

Loss allowances relate to the expected credit loss (ECL) on unbilled revenue 0.1% (2018: 0.4%) and trade receivables. For unbilled revenue, the ECL is incorporated in the valuation of (unbilled) revenue. The aging of trade receivables as at 31 December was as follows:

2018

2019

Gross

Credit loss Credit loss in %

Gross

Credit loss Credit loss in %

Not past due

186,101 110,461 25,318 18,596 342,941 - 12,617 330,324 2,465

- 748 - 927 - 717 - 376

0.4% 0.8% 2.8%

249,609 83,361 18,683 20,594 34,706 406,953 - 28,464 378,489

- 174

0.1% 0.1% 0.9%

Past due 0 - 90 days Past due 90 - 180 days Past due 180 - 360 days

- 86

- 173

15.3% 53.0%

- 13,049 - 14,982 - 28,464

63.4% 43.2%

More than 360 days

- 9,849 - 12,617

Credit loss / Impairment

Trade receivables at book value

Loss allowances relate to the expected credit loss (ECL) based on the characteristics of the customers, the aging of the receivables, the performance of the Group credit risk management policy and any convincing forward-looking information. Aging and local payment practices and the legal terms applicable for payments in the respective jurisdiction are relevant to the Group’s policy on writing off receivables.

The movement in the loss allowances in respect of trade receivables during the year was as follows:

2018

2019

14,320

12,617

Balance as at 1 January based on incurred losses

Adjustment due to first application of IFRS 9

153

-

14,473

12,617

Balance as at 1 January based on expected losses method

Provisions made during the year Provisions used during the year Provisions reversed during the year Currency exchange rate differences

3,515 - 3,372 - 2,689

19,705 - 1,143 - 2,976

690

261

- 1,856

15,847

12,617

28,464

Balance as at 31 December

At 1 January 2018 the Group reassessed its loss allowances for trade receivables based on the expected loss method according to IFRS 9. In 2017 loss allowances were calculated based on the incurred loss method in IAS 39.

Concentration of credit risk of customers As at the reporting date there was no concentration of credit risk with any customers.

Credit risk cash and cash equivalents The Group had cash and cash equivalents of EUR 400 million at 31 December 2019

(2018: EUR 336 million), representing its maximum credit risk exposure on these assets. The cash and cash equivalents are held with bank and financial institution counterparties with investment grade credit ratings.

29.1.2 LIQUIDITY RISK Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.

The Group’s approach to managing liquidity is aimed at ensuring that it will have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions. Liquidity projections including available credit facilities are incorporated in the regular management information reviewed by the Board of Management. The focus of the liquidity review is on the net financing capacity, being free cash (see note 22) plus available credit facilities in relation to financial liabilities (see note 24). The total of free cash and available credit facilities at year-end amounted to EUR 0.9 billion (2018: EUR 0.6 billion). Furthermore, based on the Group’s financial ratios it can be concluded that the Group has significant debt capacity available under an (implied) investment grade credit profile.

ANNUAL REPORT 2019 – BOSKALIS A U L 19 -- BOSKALIS