Cathay Pacific 2003 Annual Report Download - page 21

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Cathay Pacific Airways Limited Annual Report 2003 19
Financial Review
Group net debt and equity
HK$ million Times
0302010099
0
6,000
12,000
18,000
24,000
30,000
36,000
0
0.1
0.2
0.3
0.4
0.5
0.6
Shareholders’ funds
Net borrowings
Net debt/equity ratio
Group maturity profile
by currency: borrowings
HK$ million
USD OthersJPYHKDGBPEUR
0
2,000
1,000
5,000
4,000
3,000
6,000
7, 000
8,000
14,000
13,000
12,000
11,000
10,000
9,000
Within 1 year
Between 1-2 years
Between 2-5 years
Over 5 years
Others include AUD, CAD, KRW,
NZD, SGD and TWD.
Borrowings and capital
•Borrowings increased by 15.3% to HK$26,297
million compared with HK$22,810 million
in 2002.
•Borrowings are mainly denominated in US
dollar, Japanese yen, Sterling and Euro, and
are fully repayable by 2017 with 56% at fixed
rates of interest.
•Liquid funds, 66% of which are denominated
in US dollar, increased by 15.3% to
HK$15,200 million.
•Net borrowings increased by 15.2% to
HK$11,111 million.
•The Group’s shareholders’ funds decreased
by 3.3% to HK$31,052 million.
•Net debt/equity ratio increased from
0.30 times to 0.36 times.
Financial risk management policy
•In the normal course of business the
Company is exposed to movements in
foreign exchange rates, interest rates and
jet fuel prices.
•These exposures are managed, sometimes
with the use of derivative financial
instruments, in accordance with policies
approved by the Finance Committee.
•Derivative financial instruments are used
solely for financial risk management
purposes and the Company does not hold or
issue derivative financial instruments for
trading purposes.
•Derivative financial instruments which
constitute a hedge do not expose the
Company to market risk since any change
in their market value will be offset by a
compensating change in the market value
of the asset, liability or transaction
being hedged.