Boskalis Annual Report 2018

121

Interest rate risk The Group has mainly fixed interest rate liabilities and a revolving multi-currency facility with a variable interest rate. With a view to managing interest rate risks, the policy is that interest rates for loans payable are in principle 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 2018

Interest rate One year or less

1 - 5 years

Over 5 years

Total

Cash and cash equivalents

0.00% 2.68% 3.66% 0.50% 6.95% 2.32%

311,740 24,467

- -

- - - - - - -

311,740 24,467 - 283,572 - 150,000 - 5,179 - 28,330 - 130,874

Short-term deposits

US Private Placements (USD)

-

- 283,572

Revolving multi-currency credit facility (EUR) Other interest-bearing borrowings (EUR)

-

- 150,000

- 282

- 4,897

Bank overdrafts

- 28,330 307,595

-

- 438,469

As at 31 December 2017

Interest rate One year or less

1 - 5 years

Over 5 years

Total

Cash and cash equivalents

0.00% 2.36% 3.66% 3.40% 0.34%

184,624

- - -

- -

184,624

Short-term deposits

7,324

7,324

US Private Placements (USD)

-

- 269,398

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

Other interest-bearing borrowings (EUR)

- 297

- 1,169

- -

Bank overdrafts

- 40,794 150,857

-

- 1,169

- 269,398

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 have an impact on profit.

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

2018

2017

FIXED RATE INSTRUMENTS Financial assets

-

-

Financial liabilities

- 288,751 - 288,751

- 270,864 - 270,864

VARIABLE RATE INSTRUMENTS Financial assets

336,207 - 178,330 157,877

191,948 - 40,794 151,154

Financial liabilities

A drop of 100 basis points, insofar as possible, in interest rates as at 31 December 2018 would have had no material impact on the Group’s profit before income tax (2017: no material impact), with all other variables, in particular currency exchange rates, remaining constant. A rise of 100 basis points in interest rates as at 31 December 2018 would also have had no material impact on the Group’s profit before income tax (2017: no material impact), with all other variables, in particular currency exchange rates, remaining constant.

ANNUAL REPORT 2018 – BOSKALIS A L REP RT 2018 -- BOSKALIS