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DFDS annual report 2009 NOTEs 99
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Capital management
The Group continuously assesses the need for adjustment of the capital structure to balance the required rate of return on equity against the increased uncertainty
connected with loan capital. The equity’s share of the total liabilities totals 39% at year-end 2009 (2008: 40%, 2007: 38%). The aim is to have an equity ratio of around 40%.
The Group’s cost of capital for 2009 was calculated at 7% (2008:7%, 2007: 7%) and the return on invested capital achieved was 2.2% (2008: 6.1%, 2007: 8.6%).
The Group’s dividend policy is to distribute around 30% of the DFDS shareholders’ share of the Group’s profits, however, taking into consideration any significant
investments. Proposed dividends for 2009 amount to DKK 0.00 per share equal to 0.0% of the profits (2008: DKK 0 per share or 0% of the profits, 2007: DKK 15 per
share or 30.0% of the profits after minority interests).
Hedging of expected future transactions (DKK ‘000)
Consolidated
EXPECTED FUTURE TRANSACTIONS
HEDGE INSTRUMENT
TIME TO
MATURITY
NOTIONAL
PRINCIPAL
AMOUNT
EXPECTED TIMING OF RECYCLING TO PROFIT AND LOSS
OF GAINS/LOSSES RECOGNISED IN THE EQUITY
0-1 YEAR 1-3 YEARS 3-5 YEARS
MORE THAN
5 YEARS FAIR VALUE
2007
Goods purchased and sold Forward exchange contracts 0-2 years 3,841 65 65
Goods purchased and sold Forward exchange contracts 0-2 years 1,452,668 -12,905 -12,905
Interest Interest swaps 0-10 years 1,189,175 5,342 8,386 4,311 2,960 21,602
Interest Interest swaps 0-10 years 953,670 -5,125 -10,121 -9,970 -7,968 -33,244
-12,688 -1,670 -5,659 -5,008 -24,482
2008
Goods purchased and sold Forward exchange contracts 0-2 years 247,533 26,093 26,108
Goods purchased and sold Forward exchange contracts 0-2 years 153,964 -25,465 -25,465
Interest Interest swaps 0-7 years 445,000 902 301 1,257
Interest Interest swaps 0-7 years 2,383,531 -15,131 -23,597 -22,442 -6,901 -68,228
Interest Currency swaps 0-1 years 208,333 -1,267 -1,267
Goods purchased
Oil contracts for forward
delivery (tons) 0-6 months 84,000 -35,472 -35,472
-50,340 -23,296 -22,442 -6,901 -103,067
2009
Interest Interest swaps 0-6 years 1,350,659 -17,671 -32,691 -21,672 -915 -78,401
Goods purchased
Oil contracts for forward
delivery (tons) 0-6 months 12,000 10,420 10,420
-7,251 -32,691 -21,672 -915 -67,981
For 2009 an income of DKK -5.4 million (2008 DKK 0.0 million, 2007: DKK 0.2 million) is recognised in the income statement due to inefficiency in hedging of
expected future transactions.
The fair values have been calculated by discounting the expected future interest payments. The discount rate for each interest payment is estimated on the basis
of a swap interest curve, which is calculated based on a wide spread of market interest rates.
Note 28 continued on the next page >>>