ÖBB Annual Report 2023

283 Consolidated Financial Statements Österreichische Bundesbahnen-Holding Aktiengesellschaft Consolidated Financial Statements | Group Management Report 65 29.2.a. Interest rate risk Risks from the exposure to changes of interest rates are risks to the profitability and the value of the ÖBB Group and may occur in the following forms: – Interest payment risk (increased interest cost due to the market development) – Present value risk (change in value of the portfolio) Risks arising from changes in market interest rates may affect the financial result of the ÖBB Group due to the structure of its Consolidated Statement of Financial Position. It is therefore important to limit possible market interest rate fluctuations above a certain level, for example by using derivative financial instruments, in order to keep their impact on earnings development to a minimum. The use of appropriate derivative financial instruments to manage interest risks (interest rate swaps) is based on portfolio analyses and recommendations by ÖBB-Holding AG and corresponding decisions of the subsidiaries. The ÖBB Group is exposed to interest rate risks mainly in the Eurozone. In order to implement the risk strategy as effectively as possible, it uses interest rate derivatives where necessary taking the present debt structure into account. Financial instruments (current and non-current) Fixed interest financial instruments Variable interest financial instruments Dec 31, 2023 in EUR million in EUR million Financial assets 241.8 4.2 Trade receivables 1.7 4.5 Other receivables and assets 0.9 0.0 Cash and cash equivalents 512.4 57.1 Total 756.8 65.8 Financial liabilities 32,214.8 229.6 of which to the federal government (OeBFA) 16,313.1 0.0 Total 32,214.8 229.6 Financial instruments (current and non-current) Fixed interest financial instruments Variable interest financial instruments Dec 31, 2022 in EUR million in EUR million Financial assets 167.0 13.5 Trade receivables 1.0 4.5 Other receivables and assets 0.9 0.0 Cash and cash equivalents 152.1 31.0 Total 321.0 49.0 Financial liabilities 28,959.5 296.5 of which to the federal government (OeBFA) 11,916.4 0.0 Total 28,959.5 296.5 The underlying hedged items were classified as fixed or variable interest financial instruments, taking into account the derivatives (hedging instruments) concluded. A fundamental reform of the main reference interest rates is being undertaken worldwide, including the replacement of some “Interbank Offered Rates” (IBORs) with alternative, almost risk-free interest rates (referred to as “IBOR reform”). There is uncertainty about the timing and methods of transition. EURIBOR can continue to be used as a reference interest rate without restriction. This allows market participants to continue using EURIBOR for existing contracts. ÖBB Group assumes that EURIBOR will remain the reference interest rate for the foreseeable future (at least until 2025). None of the current Group EURIBOR-linked credit agreements contain adequate and robust fallback clauses for a cessation of the reference rate. Various industry groups are working on corresponding fallback clauses for different instruments and EURIBORs, which the Group will implement as appropriate. The Group has been closely monitoring the market and the outcomes of the various industry working groups that are managing the transition to the new reference rates. This includes announcements by the relevant supervisory authorities. In response, there will be ongoing coordination with commercial banks, discussions with SAP consultants regarding mapping of fallback clauses, and exchanges with the Treasury interest lobby group.