Changes in interest rates on interest-bearing receivables and debts in different currencies create interest rate risks. These risks are managed by adjusting the duration of debt to the targeted level through different combinations of fixed and floating interest in the debt portfolio. No interest rate derivatives were in use at the end of December 2008.
Financial instruments’ interest rate risk sensitivity analysis according to IFRS 7
The following assumptions have been used in the preparation of the sensitivity analysis. The sensitivity analysis for the interest rate risk represents the impact of a reasonably possible change in the interest rates (+/- 1 percentage point) to the net income before taxes. The impact of the change in the interest rate is calculated for the year end closing balance of the interest-bearing floating rate net debt, ie. the level of interest-bearing net debt is assumed to be on the same year end level during the whole financial year. The net floating rate debt would amount to EUR -222.4 million at the end of December 2008 (Dec 31, 2007: -51.6). At the end of 2008, the 1 percent interest rate sensitivity amounted to +/-2.2 million EUR (Dec 31, 2007: +/-0.5). There is no effect on the balance sheet.