Annual Report 2005/06 - voestalpine

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Consolidated Financial Statements
Annual Report 2005/06
In the 2005/06, business year, hedge accounting according to IAS 39
were applied to foreign exchange hedges. EUR 10.3 million were
charged against equity due to changes in the fair values of the
derivatives.
interest rate risk
By issuing a convertible bond with a volume of EUR 250 million and a
fixed coupon of 1.5% with a five-year maturity, interest rate commitments
of the liabilities portfolio were extended to 2.8 years. In this way,
we implemented our long-term strategy of extending interest rate
commitments during periods of low interest rate periods.
Should the interest rate rise by 1%, net interest expense for floating
interest financial instruments would increase by EUR 2.2 million (prior
year: increase of net interest expense to EUR 2.5 million).
Due to the excellent liquidity trends during the business year, interestbearing
assets were significantly increased. Investment in interest-bearing
securities was increased by EUR 145 million and short-term investments
by EUR 363 million. The present value risk determined on the
basis of the present-value-basis-point method as of March 31, 2006, on
the assets side amounts to EUR 10 million (prior year:
EUR 4.6 million) with an interest rate change of 1%, and on the liabilities
side EUR 24.8 million (prior year: EUR 19.2 million). In the case of
a drop in interest rates of 1%, voestalpine AG would have a net present
value loss of EUR 14.8 million (prior year: EUR 14.6 million).
With a 1.3-year interest rate commitment (including money market
investments), the weighted average on the assets side amounts to 2.87%
and on the liabilities side to 3.18% at an interest rate commitment of
2.2 years.