The Group’s financial structure seeks to limit the risks arising fromthe uncertainty in financialmarkets trying to minimise potential adverse effects on financial profitability.
Referring to the distribution of debt at 2014 year-end, long-term debt represents 98% (96% in 2013), while debt maturity is in 2021 (2018 in 2013). To minimise exposure to the risk of interest rates, Saba maintains a high percentage of debt at a fixedrate, 59% (52% in 2013 restated), so it is not expected that any changes in interest rates may have a significant impact on thecompany’s accounts. The average interest rate in the year 2014 stood at 4.5% (4.9% in 2013 restated).
In regard to risk management, the policy of the Group’s Financial Department is to cover all significant exposures (exchangerate, interest rate, credit and liquidity), provided that there are appropriate instruments and the cost of such protection is reasonable for the risks covered.
Regarding the exchange rate, Saba operates internationally and owns assets in foreign currency only in Chile; therefore, it is exposed to exchange rate risk due to operations with foreign currencies, especially the Chilean peso, as well as investments made there. Despite this exposure, a variation of 10% in the euro/Chilean peso exchange rate compared to the year-end on 31st December 2014, would have an impact on results of +/- 117 thousand euros and an insignificant impact on equity fordifferences arising in the consolidation process.
