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7.3.2. Market risk

Market risk is defined as the risk of the Group’s financial results or economic value being adversely affected by changes in the financial and commodity markets.

In line with the adopted policy, the purpose of the market risk management process in place at the Group is to:

  • Reduce the volatility of cash flows related to the Group’s operations to acceptable levels in the short- and medium term
  • Build company value in the long term.

Considering potential impacts on its financial results, the Group has identified the following market risks:

Market risk Approach to risk management
Impact on financial results Natural gas and oil product prices The Group manages the risk by purchasing derivatives to hedge natural gas prices.
EUR/PLN, USD/PLN and NOK/PLN exchange rates [see above] The risk is mainly related to trade payables and debt instruments in issue. The Group hedges the risk by making purchases in the same currency.
Interest rates The Group hedges the risk by purchasing derivatives.
Other commodity prices The risk considered immaterial.