Investor Presentaiton
126
A.P. Møller-Mærsk A/S Annual Report 2020
Financials
Parent company financial statements
Notes index
Note 11 Provisions
Table 11.1
1 January 2020
Amount used
Amount reversed
31 December 2020
Of which:
Classified as non-current
Restructuring
Other
Total
Table 11.1
3
78
81
Other includes provisions for unsettled claims, legal dis-
putes, etc.
3
3
35
35
43
43
The provisions are subject to considerably uncertainty,
cf. note 20.
Note 12 Financial instruments and risks
The company's derivatives are presented in the balance sheet with the following amounts:
Table 12.1
Non-current receivables
Current receivables
Non-current liabilities
Current liabilities
Assets/liabilities, net
The gains/losses of the derivatives are recognised as follows:
43
43
2020
2019
259
165
317
65
287
324
302
94
-13
-188
Amounts in USD million
==
Table 12.1
The company's activities expose it to a variety of
financial risks:
Market risks, i.e. currency risk and interest rate risk
⚫ Credit risk
Liquidity risk.
The company's overall risk management programme
focuses on the unpredictability of financial markets and
seeks to minimise the potential adverse effects on the
company's financial performance. The company uses
derivative financial instruments to hedge certain risk
exposures.
Risk management is carried out by a central finance
department under policies approved by the Board of
Directors. The finance department identifies, evaluates
and hedges financial risks in close cooperation with the
company's entities.
Market risk
The sensitivity analyses for currency risk and interest rate
risk have been prepared on the basis that the amount of
net debt, the ratio of fixed to floating interest rates of
the debt, and the proportion of financial instruments in
foreign currencies remain unchanged from hedge desig-
nations in place at 31 December 2020. Furthermore, it is
assumed that the exchange rate and interest rate sensi-
tivities have a symmetric impact, i.e. an increase in rates
results in the same absolute movement as a decrease
in rates.
The sensitivity analyses show the effect on profit and
equity of a reasonably possible change in exchange rates
and interest rates.
Table 12.2
Hedges comprise primarily currency derivatives and in-
terest rate derivatives, which are further described in the
following sections.
Table 12.2
Hedging interest rate risk
Total effective hedging
Ineffectiveness recognised in financial expenses
Total reclassified from equity reserve for hedges
2020
2019
-25
-26
-25
-26
-12
-4
-37
-30
Derivatives accounted for as held for trading
Currency derivatives recognised directly in financial income/expenses
Interest rate derivatives recognised directly in financial income/expenses
199
66
59
19
Oil prices and freight rate derivatives recognised directly in other income/costs
Net gains/losses recognised directly in the income statement
-1
258
84
Total
221
54
Market risk is the risk that changes in market prices, such
as foreign exchange rates and interest rates, will affect
the company's profit or the value of its holdings of finan-
cial instruments. The sensitivity analyses in the currency
risk and interest rate risk sections relate to the position of
financial instruments at 31 December 2020.View entire presentation