Cathay Pacific 2000 Annual Report Download - page 24

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22 CATHAY PACIFIC AIRWAYS LIM ITED ANNUAL REPORT 2000
Borrowings and capital
Borrow ings decreased by 15.9% to
HK$20,838 million compared w ith
HK$24,783 million in 1999.
Borrow ings are mainly denominated in US
dollar, Japanese yen, Sterling and Euro, and
are fully repayable by 2016 w ith 85% being
at fixed rates of interest.
Liquid funds, 84% of which are
denominated in US dollar, decreased by
4.8% to HK$11,040 million.
Net borrow ings decreased by 25.2% to
HK$9,886 million.
The Group’s shareholders’ funds increased
by 15.1% to HK$31,324 million.
Net debt/equity ratio improved from 0.49
times to 0.32 times.
Financial risk management policy
In the normal course of business, the
Group is exposed to fluctuations in foreign
currencies, interest rates and jet fuel prices.
These exposures are managed, sometimes
with the use of derivative financial
instruments, by the Treasury Department
of Cathay Pacific in accordance w ith the
Group’s approved policies and parameters.
Derivative financial instruments are used
solely for financial risk management
purposes and the Group does not hold or
issue derivative financial instruments for
trading purposes.
Derivative financial instruments which
constitute a hedge do not expose the
Group to market risk since any change
in their market value w ill be offset by a
compensating change in the market
value of the asset, liability or transaction
being hedged.
Financial Review
Group maturity profile by
currency: borrowings
HK$ million
Within 1 year
Betw een 2-5 years
Others include KRW, NZD, SGD and TWD.
Betw een 1-2 years
Over 5 years
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
OthersUSDJPYHKDGBPEURCHFCADAUD
Group net debt and equity
HK$ million Times
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 debt/equity ratio
Net borrowings
20001999199819971996
Group interest rate profile: borrowings
%
0
20
40
60
80
100
Floating Fixed
20001999199819971996