Investor Presentaiton
127
A.P. Møller-Mærsk A/S Annual Report 2020
Financials
Parent company financial statements
Notes index
Note 12 Financial instruments and risks - continued
Table 12.3
Recognised at fair value through profit and loss
Currency derivatives
Interest derivatives
Total
Amounts in USD million ==
2020
Fair value
2019
13
-20
-62
1
-49
-19
Equity before tax
2019
Table 12.3
Currency risk
The company's currency risk arises primarily from its
treasury activities where financing is obtained and pro-
vided in a wide range of currencies other than USD such
as EUR, GBP and NOK.
The main purpose of hedging the company's currency
risk is to hedge the USD value of the company's net cash
flow and reduce fluctuations in the company's profit.
The company uses various financial derivatives, including
forwards, option contracts and cross-currency swaps, to
hedge these risks. The key aspects of the currency hedg-
ing policy are as follows:
Net cash flows in other significant currencies than USD
are hedged using a layered model with a 12-month
horizon
Significant capital commitments or divestments in
other currencies than USD are hedged
. Most non-USD debt is hedged, however, depending on
the asset-liability match and the currency of the gen-
erated cash flow.
Table 12.4
The company enters into derivatives to hedge currency
exposures that do not qualify for hedge accounting.
These derivatives are classified as fair value through
profit or loss.
An increase in the USD exchange rate of 10% against
all other significant currencies to which the company is
exposed is presented in the table.
Table 12.4
Profit before tax
2020
2019
2020
EUR
-91
-307
-91
Other currencies
-65
-50
-65
-307
-50
Total
-156
-357
-156
-357View entire presentation