Boskalis jaarverslagen 2011

Fuel price risk

Material fuel costs are hedged in a number of different ways. Where possible, fuel cost variation clauses are included in the contract. Some contracts may also require fuel to be supplied by the client. In other cases, where substantial fuel risks exist, these are usually hedged with financial instruments such as forward contracts or futures.

Financial derivatives (such as forward contracts, options, interest rate swaps and futures) for hedging currency risks, fuel cost risks and/or other risks are only used where there is a physical underlying transaction. However, there is a risk that, in the wake of a cancellation or substantial reduction in the size of contracts, losses may arise from the unwinding or settlement of the financial derivatives taken out but for which the underlying transaction or cash flows will no longer be realized.

 

Added to My report add to My report Source: Annual review 2011, Report of the Board of Management, page 52