| Exposure to currency risk | Risk management |
| Currency risk is associated with potential changes in exchange rates that may in turn lead to changes in the Group’s cash flows.
The Group’s exposure to currency risk stems from the obligation to comply with the requirement to purchase and submit for redemption emission allowances, as well as investment expenditures and performance of service contracts with counterparties whose remuneration is denominated in foreign currencies. |
Hedging is performed on the basis of ENEA Group’s currency risk and interest rate risk management policy.
Currency risk is mainly hedged using FX forwards. Currency hedges are intended to ensure a fixed value of cash flows in domestic currency that are generated in connection with operating and investing activities. In order to secure maximum effectiveness of hedging, FX forwards are executed for periods and amounts that correspond to currency exposure. This results in an economic link between the underlying items and the hedging derivatives. With a close link between the hedged item and the hedging instrument, the main source of ineffectiveness of such links is improper performance of contracts by counterparties or adjustment of payment deadlines through annexes to contracts with counterparties. In accordance with ENEA Group’s currency risk and interest rate risk management policy, hedging is each time based on a hedging strategy dedicated to the specific exposure and approved by ENEA Group’s Risk Committee. In accordance with its rules, the Group hedges all of its currency exposure that it considers as material, i.e. which exceeds the exposure limit. The Group applies hedge accounting in this area. |
FX forwards
In the 12-month period ending 31 December 2021 ENEA S.A. executed nine FX forward transactions for a total volume of EUR 1 116 thousand. The last FX FORWARD transaction was settled in December 2021, in connection with which financial assets at fair value concerning the measurement of forward instruments as at 31 December 2021 amounted to PLN 0.00 (31 December 2020: PLN 0.00).
In 2021, ENEA Trading Sp. z o.o. executed 343 FX Forward transactions worth EUR 1 002 082 thousand. Measurement of these instruments as at 31 December 2021 was PLN 142 217 thousand. In 2020, ENEA Trading Sp. z o.o. executed 160 FX Forward transactions worth EUR 273 645 thousand. The book value of these instruments as of 31 December 2020 was PLN 42 279 thousand.
In 2021, ENEA Nowa Energia Sp. z o.o. executed six FX Forward transactions worth EUR 1 901 thousand. Measurement of these instruments as at 31 December 2021 was PLN -12 thousand.
In 2021, ENEA Elektrownia Połaniec S.A. executed six FX Forward transactions worth EUR 512 thousand. Measurement of these instruments as at 31 December 2021 was PLN -34 thousand (PLN 0 thousand as at 31 December 2020).
In 2021, ENEA Centrum Sp. z o.o. executed one FX Forward transaction worth EUR 4 826 thousand. Measurement of this instrument as at 31 December 2021 was PLN -388 thousand (PLN 0 thousand as at 31 December 2020).
The following table shows the Group’s exposure to currency risk:
| As at 31 December 2021 | As at 31 December 2020 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Financial result | Financial result | Financial result | |||||||||
| Book value | including value in EUR expressed in functional currency (PLN) | Exchange rate up +1% | Exchange rate down -1% | including value in USD expressed in functional currency (PLN) | Exchange rate up +1% | Exchange rate down -1% | Book value | including value in EUR expressed in functional currency (PLN) | Exchange rate up +1% | Exchange rate down -1% | |
| Financial assets | |||||||||||
| Cash and cash equivalents | 4 153 553 | 1 948 247 | 19 482 | (19 482) | 75 941 | 759 | (759) | 1 941 554 | 500 960 | 5 010 | (5 010) |
| Trade and other receivables | 2 626 611 | 731 227 | 7 312 | (7 312) | − | − | − | 1 648 562 | 305 850 | 3 059 | (3 059) |
| Financial assets measured at fair value | 614 352 | 142 217 | 1 422 | (1 422) | − | − | − | 139 851 | 42 279 | 423 | (423) |
| Financial liabilities | |||||||||||
| Trade and other payables | (4 191 685) | (4 563) | (46) | 46 | (4 588) | (46) | 46 | (1 680 850) | (303) | (3) | 3 |
| Net exposure | 3 202 831 | 2 817 128 | 71 353 | 2 049 117 | 848 786 | ||||||
| Impact on result before tax | 28 170 | (28 170) | 713 | (713) | 8 489 | (8 489) | |||||
| 19% tax | (5 352) | 5 352 | (135) | 135 | (1 613) | 1 613 | |||||
| Net exposure after tax | 22 818 | (22 818) | 578 | (578) | 6 876 | (6 876) | |||||