Boskalis_Annual Report_2017

117

due in part to hedge accounting, the sensitivity in the profit or loss account is limited for financing in currencies other than the euro.

Interest rate risk The Group has mainly fixed interest rate liabilities and a revolving multi-currency facility with a variable interest rates. With a view to controlling interest risks, in principle the policy is that interest rates for loans payable are primarily fixed for the entire maturity period. This is achieved by contracting loans that carry a fixed interest rate and/or by using derivatives such as interest rate swaps.

The interest rates and maturity profiles of interest-bearing loans, deposits and cash and cash equivalents are stated below:

As at 31 December 2017

Interest rate One year or less

1 - 5 years

Over 5 years

Total

0.00% 2.36% 3.66% 3.40% 0.34%

184,624

- - -

- -

184,624

Cash and cash equivalents

7,324

7,324

Short-term deposits

-

- 269,398

- 269,398 - 1,466 - 40,794 - 119,710

US Private Placements (USD) Other interest-bearing borrowings

- 297

- 1,169

- -

- 40,794 150,857

-

Bank overdrafts

- 1,169

- 269,398

As at 31 December 2016

Interest rate One year or less

1 - 5 years

Over 5 years

Total

Cash and cash equivalents

0.00% 0.35% 4.16% 5.19% 3.40% 1.76%

839,395 125,936 - 437,931 - 14,920

- - - -

- -

839,395 125,936 - 744,807 - 14,920

Short-term deposits

US Private Placements (USD) US Private Placements (GBP) Other interest-bearing borrowings

- 306,876

- - -

- 293

- 1,411

- 1,704 - 1,188

Bank overdrafts

- 1,188

-

510,999

- 1,411

- 306,876

202,712

The US private placements and some of the cash and cash equivalents, short-term deposits and other interest-bearing borrowings have fixed interest rates.

Sensitivity analysis In managing interest rate risks the Group aims to reduce the impact of short-term fluctuations on Group earnings. In the long term, however, permanent changes in interest rates will have an impact on profit.

At the reporting date, the interest rate profile of the Group’s interest-bearing financial instruments was:

2017

2016

FIXED RATE INSTRUMENTS Financial assets

-

264,093 - 761,431 - 497,338

- 270,864 - 270,864

Financial liabilities

VARIABLE RATE INSTRUMENTS Financial assets

191,948 - 40,794 151,154

701,238

Financial liabilities

- 1,188

700,050

A drop of 100 basis points, insofar as possible, in interest rates at 31 December 2017 would have no material impact on the Group’s profit before income tax (2016: no material impact), with all other variables, in particular currency exchange rates, remaining constant. A rise of 100 basis points in interest rates at 31 December 2017 would have also no material impact on the Group’s profit before income tax (2016: increase by a maximum of EUR 7.0 million), with all other variables, in particular currency exchange rates, remaining constant.

ANNUAL REPORT 2017 – BOSKALIS A L REP RT 2017 -- BOSKALIS