SUSTAINABILITY REPORT 2016
b) Interest Rate Risk
Since the Group does not have significant interest-bearing assets, besides the
government bonds issued by Angola for hedging purposes, the profit and the
cash flows of the financing activity are greatly independent from the changes
of the interest rate of the market. The Group’s interest rate risk comes from
liabilities, specifically from long term loans. The fixed rate loans expose the
Group to the risk of the fair value related to the interest rate. With the current
level of the interest rates, the Group’s policy, regarding long term financing,
is to totally or partially set the interest rates. Ibersol made use of operations
to hedge the interest rate risk of 30% of the loans granted, until October
2016. For loans contracted with a six year maturity for the acquisition of EOG,
the Group will implement, during 2017, a coverage of at least 50%.
c) Credit Risk
In the main activity of the Group, the sales are paid in cash or credit/debit
card, hence the Group has no relevant credit risk concentrations. However,
with the increased sales in the catering business, where a significant part of
its sales is made on credit, the Group started monitoring more regularly the
accounts receivable, aiming to:
i) control the amount of credit granted to the customers;
ii) analyse the age and recoverability of the amounts receivable;
iii) analyse the customers’ risk profile.
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