Cathay Pacific 2015 Annual Report Download - page 28

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Cathay Pacific Airways Limited
26
• The Group’s fuel hedging exposure at 31st December
2015 is set out in the table below.
• The Group’s policy is to reduce exposure to fuel price
risk by hedging a percentage of its expected fuel
consumption. As the Group uses a combination of fuel
derivatives to achieve its desired hedging position, the
percentage of expected consumption hedged will vary
depending on the nature and combination of contracts
which generate payments in any particular range of fuel
prices. The chart indicates the estimated maximum
percentage of projected consumption by year covered
by hedging transactions at various strike Brent prices.
Foreign exchange
• 50% of the Group’s non United States dollars (“USD”)
revenue arises from foreign currencies, the five largest
being Renminbi, Australian dollars, Euros, New Taiwan
dollars and Pound sterling.
• The Group generates a surplus in most of its revenue
currencies, although the USD is an exception as capital
expenditure, debt repayments, and fuel purchases are
typically denominated in USD. The Group maintains its
deposits in USD to mitigate the natural operating
shortfall. The Group manages its foreign exchange
exposure by matching as far as possible, receipts and
payments in each currency. Surpluses of convertible
currencies are sold for USD as soon as practicable. The
Group’s policy is to reduce its exposure to foreign
exchange risk by hedging a percentage of its forecast
net foreign currency cash flows, primarily using foreign
exchange forwards and swaps.
Financial Review
0%
10%
20%
30%
70%
60%
40%
50%
$50 $60 $70 $80 $90 $100 $110 $120 $130
2016 2017 2018
Percentageconsumptionsubjecttohedgingcontracts
Maximum fuel hedging exposure
Brent(US$/barrel)
1H 2019
Total assets
Buildings
and other
equipment
Intangible
assets
Aircraft and
related
equipment
Current
assets
Long-term
investments
and others
52%
6%
7%
19%
16%
Taxation
• The tax charge increased by HK$558 million to HK$1,157
million, principally due to an increase in deferred tax
charge arisen mainly from an increase in liability on
accelerated tax depreciation.
Dividends
• Dividends proposed for the year are HK$2,085 million,
representing a dividend cover of 2.9 times.
• Dividends per share increased from HK$0.36 to HK$0.53.
Assets
• Total assets at 31st December 2015 were HK$172,827
million.
• During the year, additions to property, plant and
equipment were HK$12,419 million, comprising
HK$10,489 million for aircraft and related equipment,
HK$1,403 million for buildings and HK$527 million for
other equipment.
HKD
EUR
TWD
GBP
USD
Revenue by currency
5%
AUD
5%
CNY
15%
4%
4%
Others17%
16%
34%