Q2 2021 Financial Highlights and Offshore Wind Build-Out Plan
Currency risk management
General principles
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Highly certain cash flows are hedged
Cost-of-hedging is minimized by netting of exposures in the portfolio of
projects, as well as use of construction contracts and debt in local
currencies.
Managing outright long risk
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Operations: 5-year minimum hedging staircase mandate by the Board
of Directors with 100% in year 1 - declining to 20% in year 5. The
hedging staircase is a compromise between stabilizing cash flows in
the front-end and ensuring a balanced FFO/NIBD.
Beyond the 5-year horizon the currency exposures are to some extent
hedged with foreign-currency debt.
Managing time-spread risk (new markets)
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Construction period: Hedge 100 % of year 1 currency cash flow risk by
swapping the exposure to a year with the same currency revenue.
In new markets the capital expenditures beyond year 1 are netted
with future revenue in the same currency.
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