Page 115 - EVRY Annual Report 2012

Annual Accounts Group 115
Interest rate swaps 31 December 2012:
Currency Amount Maturity date Fixed interest rate
Interest rate swap Handelsbanken SEK 494 14.01.13 3.405 %
Interest rate swap Nordea NOK 500 15.04.13 4.88 %
Interest rate swap Nordea NOK 300 14.11.14 3.01 %
Interest rate swap Nordea SEK 200 16.11.15 2.35 %
Interest rate swap Nordea NOK 500 16.11.15 3.19 %
Interest rate swap Nordea NOK 230 16.01.15 2.608 %
The average duration of interest rate swap agreements as at 31 December 2012 was 1.67 years.
Interest rate risk – sensitivity analysis
The group’s exposure to interest risk is dependent on the general level of market interest rates. The company incurs
significant interest costs on its borrowings, and a change in interest rates would represent an significant increase/
decrease in the company’s overall earnings.
The group uses interest rate swaps to hedge against large fluctuations in its cash flow. An increase in the general
level of interest rates will cause an increase in interest expense, but the effect will be offset to some extent by inter-
est rate swaps through which the group pays a fixed rate of interest and receives a floating rate of interest.
The group calculates the valuation effects on its holdings of financial instruments by simulating a change in the
yield curve. An increase in the general interest rate will increase the value of the group’s interest rate swaps, while
at the same time the group’s interest costs will rise as a result of higher interest rates payable on the part of its total
borrowings that is subject to floating interest rates.
The table below shows the effect of a n increase of 100 basis points in interest rates on the consolidated profit and loss account:
NOK million 2012 2011 2010
Change in fair value interes rate swaps 31.2 46.6 14.7
Change in interest expenses after tax 9.9 7.8 17.8
Total effect on comprehensive income 21.3 38.8 -3.4
B) Exchange rate risk and currency hedge
Financial items per currency 31 December 2012:
NOK million SEK USD EUR Other
Accounts receivable 585.9 30.1 64.9 37.0
Accounts payable 214.0 4.0 27.5 14.8
Bank deposits 142.7 33.5 16.7 31.0
Non-current liabilities 913.0 - - -
Net exposure financial position -398.4 59.5 54.1 53.3
At the end of 2012 the group had borrowed SEK 1,050 million to hedge its investments in Sweden. Translation dif-
ferences in respect of this loan and receivables due from foreign activities are applied as comprehensive income. The
translation difference recognised in 2011 amounted to NOK -4.0 million.
Net investments denominated in SEK amounted to NOK 773 million at 31 December 2012. Accordingly, a change in
the SEK/NOK exchange rate of 100 basis points would cause a change in the book value of NOK 7.7 million.