Annual
report 2020
Annual
report 2020
The liquidity risk is a risk of encountering difficulties in meeting obligations associated with financial liabilities. The Group’s liquidity risk management involves forecasting future cash flows, analysing the level of liquid assets in relation to cash flows, monitoring liquidity ratios and maintaining a diverse range of funding sources including back-up credit facilities. In order to increase efficiency, the liquidity management process is optimised through a centralised treasury function of the Group, as liquid asset surpluses generated by the Group entities are invested and managed by the central treasury. The Group’s cash surplus is invested into short-term highly-liquid financial instruments – mainly bank deposits. Additionally, the Cash Management Treasury Agreement with Orange S.A. enables the Group to deposit its cash surpluses with Orange S.A. The Group also manages liquidity risk by maintaining committed, unused credit facilities, which create a liquidity reserve to secure solvency and financial flexibility. The above-mentioned Cash Management Treasury Agreement with Orange S.A. gives the Group access to back-up liquidity funding with headroom of up to PLN 500 million. No drawdown was made on this facility as at 31 December 2020. The Group also has a revolving credit line from the Orange Group for up to PLN 1,500 million and other credit lines for up to PLN 150 million, of which PLN 172 million was used as at 31 December 2020. Therefore, as at 31 December 2020, the Group had unused credit facilities amounting to PLN 1,978 million (as at 31 December 2019, PLN 1,516 million). Liquidity risk is measured by applying following ratios calculated and monitored by the Group regularly: The liquidity ratio (representing the relation between available financing sources, i.e. cash and cash equivalents and credit facilities, and debt repayments during next 12 and 18 months) and current liquidity ratio (representing the relation between unused credit facilities, current assets and current liabilities) are presented in the following table: The maturity analysis for the contractual undiscounted cash flows resulting from the Group’s financial liabilities as at 31 December 2020 and 2019 is presented below. As at 31 December 2020 and 2019, amounts in foreign currency were translated at the National Bank of Poland period-end average exchange rates. The variable interest payments arising from the financial instruments were calculated using the interest rates applicable as at 31 December 2020 and 2019, respectively. The average duration for the existing debt portfolio as at 31 December 2020 was 1.4 years (2.4 years as at 31 December 2019). Previous topic Next topic
(in PLN millions)
Liquidity ratios
At 31 December
2020At 31 December
2019
Liquidity ratio (incl. derivatives) – next 12 months(1)
62%
609%
Unused credit facilities (excluding short term)
1,84
1,32
Cash and cash equivalents
358
404
Debt repayments(2)
3,648
212
Derivatives repayments(3)
(79)
71
Liquidity ratio (incl. derivatives) – next 18 months(1)
58%
45%
Unused credit facilities (excluding short term)
1,84
1,32
Cash and cash equivalents
358
404
Debt repayments(2)
3,829
3,8
Derivatives repayments(3)
(60)
52
Current liquidity ratio (incl. unused credit facilities)
68%
115%
Unused credit facilities (excluding short term)
1,84
1,32
Total current assets
3,363
3,493
Total current liabilities
7,637
4,191
Current liquidity ratio (incl. unused credit facilities and new loan agreement)(4)
105%
Not applicable
Unused credit facilities (excluding short term)
1,84
Not applicable
Total current assets
3,363
Not applicable
Total current liabilities(4)
4,937
Not applicable
(1) The ratio does not include future cash flows from operating or investing activities, nor debt refinancing.
(2) Undiscounted contractual cash flows on loans from related party and bank borrowings.
(3) Undiscounted contractual cash flows on derivatives.
(4) As a result of the new loan agreement concluded on 29 January 2021 (see Note 32), the amount of current liabilities would decrease to PLN 4,937 million and current liquidity ratio would increase to 105%.
(in PLN millions)
At 31 December 2020
Note
Carrying amount
Undiscounted contractual cash flows(1)
Non-current
Total
Within
1 year`1-2
years`2-3 years
`3-4 years
`4-5 years
More than 5 years
Total non-current
Loans from related party
20
5,99
3,633
203
784
1,51
–
–
2,497
6,13
Other financial liabilities at amortised cost
21
19
2
–
–
–
–
2
21
Derivative assets
23
(147)
(143)
–
–
–
–
–
–
(143)
Derivative liabilities
23
132
64
31
25
8
–
–
64
128
Gross financial debt after derivatives
5,996
3,573
236
809
1,518
–
–
2,563
6,136
Trade payables
16.1
2,478
2,242
166
24
24
24
49
287
2,529
Lease liabilities
21
2,704
495
435
342
296
237
1,719
3,029
3,524
Total financial liabilities (including derivative assets)
11,178
6,31
837
1,175
1,838
261
1,768
5,879
12,189
(1) Includes both nominal and interest payments.
(in PLN millions)
At 31 December 2019 (restated, see Note 2.2)
Note
Carrying amount
Undiscounted contractual cash flows(1)
Non-current
Total
Within 1 year
`1-2 years
`2-3 years
`3-4 years
`4-5 years
More than 5 years
Total non-current
Loans from related party
20
6,442
154
3,623
748
802
1,518
–
6,691
6,845
Other financial liabilities at amortised cost
69
60
10
–
–
–
–
10
70
Derivative assets
23
(45)
18
(32)
–
–
–
–
(32)
(14)
Derivative liabilities
23
75
53
18
7
5
2
–
32
85
Gross financial debt after derivatives
6,541
285
3,619
755
807
1,52
–
6,701
6,986
Trade payables
16.1
2,715
2,373
144
156
24
24
72
420
2,793
Lease liabilities
21
2,572
456
417
368
286
239
1,664
2,974
3,43
Total financial liabilities (including derivative assets)
11,828
3,114
4,18
1,279
1,117
1,783
1,736
10,095
13,209
(1) Includes both nominal and interest payments.
25.5. Share price risk
25.7. Credit risk