PROFILE
Financial
The Financial Management is responsible for managing the financial risks to
which the Group is exposed, which are directly connected to the unpredicta-
bility of the financial markets. In order to keep perspective of the continuity
of the long term operations, Ibersol seeks to minimize the adverse effects
of these uncertainties adopting an attitude, without exception. Here are the
main risks to which the Group is exposed in the course of its activities:
a) Foreign Exchange Risk
Like in previous years, the foreign Exchange risk remained high. The sub-
sidiaries located in Angola had once more their access to foreign currency
limited, which led to an extension of the payment deadlines to the inter-
national suppliers - the Yum, owner of the KFC and Pizza Hut brands, and
Iberusa ACE are the main suppliers -, what, in turn, increased the exposure
to the effects of devaluation. Regarding the funding outside the Euro zone,
the Group maintained the investment on a natural hedge policy, raising debt
preferably in local currency.
In order to control the exchange rate risk and to ensure the adequate pro-
tection of the Angolan subsidiaries 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.
If the access to foreign currency remains limited, the increase of the activity
in Angola will imply the raise of the foreign exchange risk, and therefore will
have an impact in the value of the assets and liabilities.
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