Boskalis_Annual_Report_2016

113 / 158

Credit risk cash and cash equivalents
The Group had cash and cash equivalents of EUR 965 million at 31 December 2016
(2015: EUR 794 million), representing its maximum credit risk exposure on these assets. The cash and cash
equivalents are held with bank and financial institution counterparties with investment grade credit ratings.
28.1.2 LIQUIDITY RISK
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
The Group’s approach to managing liquidity is aimed at ensuring that it will have sufficient liquidity to meet
its liabilities when due, under both normal and stressed conditions. Liquidity projections including available
credit facilities are incorporated in the regular management information reviewed by the Board of
Management. The focus of the liquidity review is on the net financing capacity, being free cash
plus available credit facilities in relation to financial liabilities ). The total of free cash and
available credit facilities at year-end amounted to EUR 1.4 billion of which EUR 0.4 billion was used to
repay the 2010 US private placement in January 2017. Furthermore, based on the Group’s financial ratios
it can be concluded that the Group has significant debt capacity available under an (implied) investment
grade credit profile.
The following are the contractual maturities of financial liabilities, including estimated interest payments and
excluding both the impact of netting agreements and financial liabilities accounted for as part of the
disposal group:
As at 31 December 2016 Book value
Contractual cash
flows One year or less 1 - 5 years
More than 5
years
US private placements 759,727 830,074 465,001 41,413 323,660
Other interest-bearing loans 1,704 1,994 351 1,643 -
Bank overdrafts 1,188 1,198 1,198 - -
Trade and other payables 1,085,684 1,085,684 1,085,684 - -
Current tax payable 152,331 152,331 152,331 - -
Derivatives 9,656 9,656 8,838 818 -
2,010,290 2,080,937 1,713,403 43,874 323,660
As at 31 December 2015 Book value
Contractual cash
flows One year or less 1 - 5 years
More than 5
years
US private placements 711,575 848,287 29,753 444,913 373,621
Revolving multi-currency credit facility 196,897 205,940 1,721 204,219 -
Other interest-bearing loans 23,889 25,360 19,198 6,162 -
Bank overdrafts 30,603 30,625 30,625 - -
Trade and other payables 1,264,099 1,264,099 1,264,099 - -
Current tax payable 182,886 182,886 182,886 - -
Derivatives 14,867 14,867 13,720 1,147 -
2,424,816 2,572,064 1,542,002 656,441 373,621
28.1.3 MARKET RISK
Market risk concerns the risk that Group income or the value of investments in financial instruments is
adversely affected by changes in market prices, such as currency exchange rates, interest rates and fuel
prices. The objective of managing market risks is to keep the market risk position within acceptable
boundaries while achieving the best possible return.
Currency risk
The presentation currency of the Group is the euro. A number of Group companies, the most important of
which being Dockwise, and substantial strategic investments (Smit Lamnalco, Keppel Smit Towage, Asian
Lift and Saam Smit Towage), have other functional currencies than the euro. The main other currency is the
US dollar (the functional currency of the Dockwise, Smit Lamnalco and Saam Smit Towage entities),
followed by the Singapore dollar. The revenue and expenses of these companies are largely or entirely
based on their functional currency, other than the euro. Group companies and strategic investments with
functional currency other than the euro contributed approximately 30% (2015: 30%) to the group revenue,
40% (2015: 45%) to the operating result excluding impairment losses and 35% (2015: 45%) to EBITDA in
113
ANNUAL REPORT 2016 – BOSKALIS