Market risk

Market risk management

Market risk is understood as the possible negative impact on the Company's results, stemming from changes in the market prices of commodities, exchange rates and interest rates, as well as the prices of debt securities, participation units in investment funds and the share prices of listed companies.

The Management Board is responsible for market risk management at KGHM Polska Miedź S.A. and for adherence to policy in this regard. The main body involved in realising market risk management is the Market Risk Committee, which makes recommendations to the Management Board in this area. 

The Company actively manages the market risk to which it is exposed.  In accordance with the applied policy, the goals of the market risk management process are:

  • to reduce volatility in the financial results,
  • to increase the probability of achieving budget assumptions,
  • to decrease the probability of the loss of liquidity,
  • to keep the Group in a good financial condition, and
  • to support the process of accomplishing the strategy and of making decisions with respect to investments, taking into consideration the sources of financing these investments.

All of the goals of market risk management should be considered as a whole, with their realisation being determined mainly by the internal situation and market conditions.

The primary technique for market risk management at KGHM Polska Miedź S.A. is the use of hedging strategies involving derivatives. Apart from this, natural hedging is also used.

 

Detailed information with respect to market risk management is found in:

Consolidated financial statement for 2015 (PDF 4.5 MB, page 45) 

Report on Group's activities for 2015 (PDF 4.5 MB, page 125) 

Mid-year consolidated financial statement for the first half of 2015 (PDF 3.7 MB, page 58) 

Report on Group's activities for the first half of 2015 (PDF 3.7 MB, page 106)