Financial statements
Section B: Notes to the Group financial statements for the year ended 30 June 2024
Section B: Notes to the Group financial statements for the year ended 30 June 2024
B14
Financial risk management and derivatives (continued)
Market risk (continued) Foreign exchange risk (continued) Sensitivity Sensitivity analysis from the following shifts in exchange rates on foreign currency risk exposures at the reporting date is as follows. These shifts in exchange rates have been selected as a reasonably possible change. This is not a forecast or prediction of future market conditions.
2024
2023
$M
$M
Increase/ (decrease) in post-tax profit
Increase/ (decrease) in post-tax profit
Increase/ (decrease) in equity
Increase/ (decrease) in equity
AUD/USD + 10 cents – 10 cents
(12)
(223)
(1)
(235)
17
303
2
319
AUD/EUR + 5 cents
— —
(15)
(1) (1)
(2)
18
– 5 cents
2
AUD/CAD + 10 cents – 10 cents AUD/CHF + 10 cents – 10 cents AUD/NOK + 50 cents – 50 cents
2
2
2
(1)
(3)
(3)
(2)
1
— —
(2)
— —
1
3
(2)
— —
— —
— —
— —
There is no significant impact on the profit and loss from foreign currency movements associated with borrowings which are swapped to Australian dollars as an offsetting amount will be recognised on the associated hedging instrument. There is exposure to equity impacts from foreign exchange movements associated with the unhedged component of investments in foreign operations and derivatives in cash flow hedges. Interest rate risk Interest rate risk arises from changes in market interest rates. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. The Group uses cross-currency interest rate swaps to convert a portion of fixed interest rate borrowings to floating interest rate borrowings. Floating interest rate borrowings give rise to cash flow interest rate risk, which is partially offset by cash and cash equivalents balances held at floating interest rates. The Group manages this interest rate risk by entering into fixed interest rate borrowings or by using interest rate swaps to convert floating interest rate borrowings to fixed interest rate borrowings.
155
154
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