16
PROFILE
Interest rate risk
As the Group does not possess remunerated assets with
significant interest, profits and cash flows from financ-
ing activities are largely unaffected by market interest
rate fluctuations.
The Group’s interest rate risk derives from its liabilities, spe-
cifically long-term loans. Fixed rate loans expose the group
to fair value risk associated to the interest rate. With the cur-
rent level of interest rates, the Group’s policy for more long-
term financing is to totally or partially fix those rates.
Ibersol used interest rate risk coverage operations
for 30% of the loans obtained. Due to the liquidity
policy followed over the last few financial years, and
because liquid assets accounted for about 40% of re-
munerated liability, exposure to interest rate risk was
deemed low.
Credit risk
The Group’s main activity involves cash or credit/debit
card sales, whereby credit risk concentrations are not rel-
evant. But due to increased sales in the catering business,
with a large number of credit sales, the Group beganmore
regular monitoring of accounts receivable, with the aimof:
i) limiting the credit granted to customers;
ii) analyzing old operations and the recoverability
of amounts owed;
iii) analyzing customers’ risk profiles.
Liquidity risk
The current situation of financial markets has made li-
quidity risk more important. Systematic financial plan-
ning based on cash flow forecasting for more than one
scenario and for periods longer than a year has become
obligatory in the Group. Short-term cash is supported in
annual planning, which is revised quarterly and adjust-
ed daily. Associated to dynamics of the subjacent busi-
nesses, the Group’s cash position has been governed by
flexible management of commercial paper and the ne-
gotiation of available credit lines at all times. The policy
of open dialogue with all financial partners has enabled
a relationship with a high degree of trust, despite the li-
quidity restrictions affecting Portuguese banks. In 2013
the Group favoured liquidity risk in detriment to cost
and has been strengthening medium and long-term fi-
nancing, resulting from the substitution of short-term
lines, with some surpluses to constitute applications.
Liquidity risk management also involves maintaining a
comfortable level of liquid assets. Ibersol ended finan-
cial year 2013 with about 22 million euros in liquid as-
sets, representing about 40% of remunerated liability.
But the lower liquidity risk means higher risk for the ap-
plication of cash surpluses.
Capital risk
The company tries to maintain an equity capital level ap-
propriate for the nature of the main business (monetary
sales and credit to suppliers) and to ensure continuity
and expansion. The balance of the capital structure is
monitored using the financial leverage ratio (defined as
net remunerated debt/(net remunerated debt + equity
capital)), aiming to keep it within the 35% to 70% range.
Given current market constraints, and for prudential
reasons, in 2013 we registered a ratio of 17%.
