Profile
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Group’s policy concerning the financial risk management is conser-
vative and cautious, and therefore, when derivative instruments are
used to hedge certain risks, we do not take any measures that are
unrelated to our operating business, or for speculative purposes.
The main sources of risk exposure are:
a) Foreign Exchange risk
The foreign exchange risk has increased significantly during the last
financial year, because the subsidiaries located in Angola had their
access to foreign currency limited, which led to an extension of the
payment deadlines, and increased the exposure to the effects of
devaluation. In what concerns financings outside the Euro area, the
Group will follow a policy of natural coverage, looking mainly for
financing in a local currency whenever the interest rate terms are
favourable.
In order to ensure the adequate protection of the Angolan subsi-
diaries against the increase of the value of the obligations held in
foreign currency, we acquired instruments indexed to the US dollar,
in order to ensure the hedging.
The increase of the activity in Angolawill lead to a raise of the foreign
exchange risk - in case the current access constraints to the foreign
currencies are kept -, affecting the value of assets and liabilities.
