analysis, the Group has taken into consideration fluctuations in the main currencies with which it operates other than its functional currency (the US dollar, the
Argentine peso, the Mexican peso and the Colombian peso). On the basis of this analysis, the Group considers that a 5% depreciation in the corresponding
currencies would have the following impact on equity:
€ Thousand
Shareholders' Equity
Profit (Loss)
US dollar
(308)
(29)
Argentine peso
(3,486)
9
Mexican peso
(4,626)
(214)
Colombian peso
(1,090)
42
Liquidity risk
Exposure to adverse situations in debt or capital markets could hinder or prevent the Group from meeting the financial needs required for its operations and
for implementing its Strategic Plan.
This risk management is focused on close monitoring the maturity schedule of the Group financial debt, as well as on proactive management and maintaining
credit lines that allow any forecast cash needs to be met (see Note 31).
The Group liquidity position in 2012 is based on the following points:
-
The Group had cash and cash equivalents amounting to €53.445 million available at 31 December 2012.
-
Undrawn credit lines amounting to €711,000 were available at 31 December 2012.
-
The Group business units have the capacity to generate cash flow from their operations in a recurrent and significant manner. Cash flow from
operations in 2012 amounted to €96.257 million.
-
The Group capacity to increase its financial debt, provided that the financial leverage ratio stood at 0.98 at 31 December 2012 (see Note 16).
On 22 March 2010, NH Hoteles, S.A. entered into an agreement with Banco Bilbao Vizcaya Argentaria, S.A. in order to increase liquidity of shares in the
subsidiary company Sotogrande, S.A. and advertising them in the market. Thus, an undertaking was made to respond to purchase orders for shares of the
above-mentioned company. Likewise, liquidity and advertising shares will be fostered when there are purchase or sale positions in the market.
Lastly, the Group makes cashflow forecasts on a systematic basis for each business unit and geographical area in order to assess their needs. This Group
liquidity policy ensures payment undertakings are fulfilled without having to request funds at onerous conditions and allows its liquidity position to be
monitored on a continuous basis.
Market risks
The Group is exposed to risks connected with the evolution of the share prices of listed companies. This risk is materialised in the remuneration schemes
linked to the listed value of shares in the Parent Company. In order to mitigate this market risk arising from an increase in listed prices, the Group entered into
the equity swap arrangement described in Note 19 of this consolidated annual report. Likewise, Note 19 also describes the sensitivity analysis of this financial
derivative with regard to changes of +/- 10% in Parent Company shares.
At 31 December 2012, 36% of its financial debt was at a fixed rate (including the syndicated loan) and it had accounts receivable guaranteed through credit
insurance up to €50 million. In addition, the Company does not consider necessary to implement an interest-rate risk mitigation policy, as its exposure to such
risks is low. Nonetheless, it maintains loan agreements in several currencies as a natural hedge (US dollar and Swiss franc).
116
REPORT ON THE CONSOLIDATED
FINANCIAL STATEMENTS
