If the Swedish krona had weakened/strengthened by 10 percent in relation to the USD with all other variables constant, the recalculated profit after tax/ effect on shareholder's equity as of December 31, 2022 would be SEK 32 thou - sand lower/higher, as a result of profits/losses on conversion of accrued income, cash and cash equivalents and accounts payable in USD. If the Swedish krona had weakened/strengthened by 10 percent relative to the EUR with all other variables constant, the recalculated profit after tax/effect on shareholder equity as of December 31, 2022 would be SEK 13 thousand higher/ lower, largely as a result of gains/losses on the conversion of cash and cash equivalents and accounts payable in EUR. Amounts reported in the Group's statement of comprehensive income During the year, the following currency-related amounts were reported in the consoli - dated income statement: 2022 2021
Note G21 Financial risk management and financial instruments by category Financial risk factors Through its operations, the Group is exposed to a variety of financial risks: mar - ket risks (currency risks, interest rate risks and price risks), credit risks and liqui- dity risks. The Group's overall risk management policy focuses on the unpre- dictability of the financial markets and strives to minimise potential adverse effects on the Group's financial results. Risk management is handled by the Group's CFO. The CFO provides monthly information on the Group's results, financial position and business perfor - mance to the Board and management of Hemnet. The Group has a finance policy established by the Parent Company's Board of Directors, which states which financial risks the Group is exposed to and how these risks should be limited. FInancial operations should support the operations of the business and be of a non-speculative nature. Interest rate risks consist of risks that developments in the interest rate market will have negative effects on the com - pany. Interest rate risks affect the Group, both as current interest expenses for loans and derivative instruments and as changes in the market value of deriva- tive instruments. According to the company's finance policy, derivative instru - ments may be used for the management of interest rate risks and currency risks, but only on condition that this follows from other contractual commit - ments, such as may exist in, for example, credit financing agreements. The objective of interest rate risk management is to achieve the desired stability in the Group's overall cash flow. At the same time, it must be ensured that pos - sible market value changes on the derivatives required do not pose unaccepta- ble risks to shareholder equity and that requirements from credit institutions on levels of interest rate hedging are met. Currency risks are low and thus not hedged. Credit risks are managed through an efficent monitoring of outstan - ding receivables. Surplus liquidity must be managed with the overall goal of preserving capital rather than generating financial income. In the first instance, surplus liquidity should be used to repay debt. Surplus liquidity can be invested as an alternative to amortisation of interest-bearing debt to meet known future financing needs. The Group operates only marginally on an international basis and currency risks are low. Currency risks arise when future business transactions are expressed in a currency that is not the unit's functional currency. The Group has no or marginal sales in foreign currencies and purchases are made marginally in EUR, USD and GBP. As a result of the limited risk, the company's financial policy is not to hedge these flows, unless there are specific reasons to do so, but to manage currency risks primarily operationally by seeking to enter into contracts in SEK. Exposure as of December 31, 2021 The Group's risk exposure in foreign currency at the end of the reporting period, expressed in million SEK, was the following: 31/12/2022 USD EUR Cash and cash equivalents - - Accounts payable 0.7 0.1 Accrued income 0.4 - Market risks Currency risks
G1 G2 G3 G4 G5 G6 G7 G8 G9
Net exchange rate gain (+)/ loss (-), included in other operating income/ other operating expenses Net exchange rate gains (+)/ currency (-), included in financial income/expenses
-0.1
-0.5
G10 G11 G12 G13 G14 G15 G16 G17 G18 G19 G20 G21 G22 G23 G24 G25 G26 G27 G28
0.1
0.1
Interest rate risks The Group's interest rate risks arise through long- and short-term borrowing. Liabilities to credit institutions constitute a bank loan from Nordea that is subject to variable interest rates and exposes the Group to interest rate risk with respect to cash flow, which is partially neutralised by cash with variable interest rates. The bank loan was renegotiated and extended during the year. The loan matures May 27, 2024 and runs at a variable interest rate equivalent to Stibor plus 1.40-2.00 percent per year, depending on the covenant Net Leverage. The fee for the undrawn part of the facility is 0.35 percent. The bank loan has a revolving credit, which means that the Group has a loan facility that makes it possible to use the unused credit at no extra cost. The Group has two covenants to relate to: Net Leverage and Interest Cover. Net leverage is calculated according to the formula net debt/consolidated EBITDA. Net debt refers to total interest-bearing liabilities (comprising the items due to credit institutions and lease liabilities in the consolidated balance sheet) less cash and cash equivalents and short-term investments. Interest Cover is calculated according to the formula consolidated EBITDA/financial expenses, net. The Group's borrowing is only in Swedish kronor. It is possible to take out a loan in another currency. Sensitivity If interest rates on borrowing in Swedish kronor in 2022 were 100 basis points higher/lower with all other variables constant, the calculated profit after tax for the financial year would have been SEK 2.4 million higher/lower, as an effect of higher/lower interest costs for borrowing with variable interest rates. Credit risks Credit risks are managed at the Group level, with the exception of credit risks regarding outstanding accounts receivable where analysis is done for each Group company. Credit risks arise through liquid funds and balances with banks, as well as credit exposures to customers. There is no high concentration of credit risks, either through exposure to individual customers, specific industries or regions. In cases where there is no independent credit assessment, a risk assessment is made of the customer's credit rating, taking into account his/her financial position, as well as past experience and other factors. Credit risk exposure and possible provision for expected loan losses are stated in Note G17 Accounts receivable, Note G19 Prepaid expenses and deferred income and Note G26 Cash and cash equivalents. Liquidity risks Cash flow forecasts are prepared by the Group's operating companies and aggregated at the Group level. At the Group level, careful rolling forecasts for the Group's liquidity reserve are followed to ensure that the Group has sufficient cash to meet the needs of its ongoing operations. At Group level, surplus liquidity may be invested in interest-bearing settlement accounts or interest-bearing money market instruments, depending on which instrument has the appropriate maturity or sufficient liquidity to meet the scope provided by the aforementioned forecasts.
P1 P2 P3 P4 P5 P6 P7 P8 P9
31/12/2021
USD
GBP
EUR
Cash and cash equivalents
0.7 0.4 0.2
0.1
0.6 0.4
Accounts payable Accrued income
- -
-
Sensitivity As shown in the table above, the Group is marginally exposed to changes in the exchange rate for USD/SEK and EUR/SEK.
62 · Hemnet Group | Annual and sustainability report 2022
Financial statements
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