Cathay Pacific 2015 Annual Report Download - page 93

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Annual Report 2015
91
29. Financial risk management (continued)
2015
HK$M
2014
HK$M
Variable rate instruments
Loans due from associates 1,467 1,356
Liquid funds 20,647 21,098
Long-term loans (32,630) (30,286)
Obligations under finance leases (20,076) (22,807)
Interest rate and currency swaps 22,070 25,201
Net exposure (8,522) (5,438)
Sensitivity analysis for interest rate exposure
An increase of 25 basis points in interest rates at the reporting date would have decreased profit or loss and
increased other equity components for the year by the amounts shown below. These amounts represent the
fair value change of interest rate swaps and financial liabilities designated as at fair value through profit or loss
at the reporting date and the increase in net finance charges. This analysis assumes that all other variables,
in particular foreign currency rates, remain constant. The analysis has been performed on the same basis as
for 2014.
2015 2014
Profit
or loss
HK$M
Other equity
components
HK$M
Profit
or loss
HK$M
Other equity
components
HK$M
Variable rate instruments (98) 149 (91) 190
(iii) Fuel price risk
Fuelaccountedfor34.0%oftheGroup’stotaloperatingexpenses(2014:39.2%).Exposuretofluctuationsinthe
fuel price is managed by the use of fuel derivatives. The profit or loss generated from these fuel derivatives is
dependent on the nature and combination of contracts which generate payoffs in any particular range of
fuel prices.
Sensitivity analysis for jet fuel price derivatives
Anincrease/(decrease)offivepercentinthejetfuelpriceatthereportingdatewouldhaveaffectedprofitor
loss and other equity components for the year by the amounts shown below. These amounts represent the
change in fair value of fuel derivatives at the reporting date.
2015 2014
Net
increase/
(decrease) in
profit or loss
HK$M
Net
increase/
(decrease) in
other equity
components
HK$M
Net
increase/
(decrease) in
profit or loss
HK$M
Net
increase/
(decrease) in
other equity
components
HK$M
Increase in jet fuel price by 5% – 1,187 (21) 1,695
Decrease in jet fuel price by 5% – (1,187) 12 (1,702)
Notes to the Financial Statements Supplementary Information