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Section B: Notes to the Group financial statements for the year ended 30 June 2026
B14 Financial risk management and derivative financial instruments (continued) Market risk (continued) Interest rate risk (continued) Exposure The Group’s exposures to interest rate risk after hedging at the end of the reporting period are as follows:
2026
2025
$M
$M
Floating interest rate borrowings
3,117
2,494
Floating interest rate exposures converted to fixed interest rates using interest rate swaps (notional principal amount) Fixed interest rate exposures converted to floating interest rates using cross-currency interest rate swaps and interest rate swaps
(2,350)
(2,469)
2,375 3,142
2,148 2,173
Floating interest rate exposure 1
Fixed interest rate borrowings after hedging Less than 1 year
1,243 8,242 8,118 (105)
1,729 8,403 8,817
1-5 years
Over 5 years
Net capitalised borrowing costs and remeasurement adjustments
(50)
Total borrowings
20,640
21,072
1. Exposure to floating rate borrowings is partially offset by cash and cash equivalent balances held at variable rates.
An analysis by maturities of the Group’s borrowings is provided in the liquidity risk section below. Sensitivity
Sensitivity analysis on the impacts to profit after tax from movements in benchmark interest rates on floating rate instruments after hedging is presented in the table below. A sensitivity range of plus and minus 100 basis points has been selected as a reasonably possible shift in interest rates. This is not a forecast or prediction of future market conditions. Movements in post-tax profit 2026 2025 $M $M Interest rates +100bps (15) (4) Interest rates –100bps 15 4 Effects of hedge accounting Financial instruments designated as hedging instruments of foreign currency and interest rate risk and the effects of hedge accounting are as follows: 2026 2025 $M $M Borrowings hedging net investment in foreign operations—USD and CAD USD CAD USD CAD
Net investment hedge USD borrowings
Net investment hedge¹
Net investment hedge USD borrowings
Net investment hedge CAD borrowings
Hedging relationship
Hedging instrument
— — —
Carrying amount of borrowings in underlying currency
550
500
370
Hedge ratio
1:1
1:1
1:1
February 2026
November 2028
Maturity dates
March 2036
—
At 30 June Carrying amount of hedging instruments
800
—
764
407
During the year Change in value of hedging instrument used for calculating hedge effectiveness Change in value of hedged item used for calculating hedge effectiveness
25
41
(10)
(7)
(158)
(32)
41 —
6 1
Hedge ineffectiveness recognised in profit and loss
—
9
1. During the period, the net investment hedge associated with the Group’s equity accounted investment in A25 was de-recognised following the disposal of the asset (refer to Note B11 for further details).
155
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