Interest-rate risk

Interest-rate risk is the risk that fair value or future cash flows will fluctuate due to changes in market interest rates. The Group is exposed to interest-rate risk through its loan financing. Interest is paid on the loans, which means that the Group’s future financial expense is not affected by changes in market interest rates.

Under the Group’s financial policy, interest-rate risk is not to be hedged.

The table below, “Sensitivity analysis for market risk”, presents the effects of changes in market interest rates.

Sensitivity analysis for market risk

The sensitivity analysis for currency risk shows the Group’s sensitivity to a 10% increase or decrease respectively in the exchange rate for SEK against the most significant foreign currencies. For transaction exposure, the table shows how the Group’s earnings after tax would have been affected by a change in the exchange rate. This also includes outstanding monetary assets and liabilities in foreign currency on the closing day, including loans between Group companies where the currency effect impacts the Group’s income statement. For translation exposure, the table shows how the Group’s earnings after tax and equity would have been affected by a change in the exchange rate.

The sensitivity analysis for interest-rate risk shows the Group’s sensitivity to a 1% increase in the market interest rate. The interest-rate sensitivity shows the effect on earnings after tax of a change in the market interest rate, as regards both interest income and expense. Since the Group does not report changes in value in other comprehensive income or equity, there is a corresponding effect on equity.

2016 Effect on profit/loss 16-12-31 Effect on share-holders equity 2015 Effect on profit/loss 15-12-31 Effect on share-holders equity
Transaction exposure
EUR 11,610 8,530
USD 2,006 11
MXN 939 359
Translastion exposure
USD -427 -429
Interest
SEK
Financial expenses 0 -70