CASE STUDY: FX Risk Management
Analysis, Risk Modelling And Hedging Strategies
“ANZ reduced the volatility in our earnings by an astonishing 300%.”
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Our board had raised concerns about our FX exposure. There had been on-going FX rate movements that seemed at odds with atypically stable ‘FX realised’ accounting entries. They wanted to better understand our exposure from a cash perspective and how effective our existing internal hedging program was.
ANZ modelling specialists spent time with us to better understand our hedging methodology, using both theoretical and actual examples. Their ‘what if’ analysis revealed that our existing practices were only partially effective in mitigating our FX exposure.
The new FX hedging methodology they implemented:
- Moved hedging time.
- Reduced volatility in our earnings by an astonishing 300%.
- Secured our future earnings.
- Made us much less exposed to currency movements.
About Viva Energy Australia
Viva Energy Australia is the exclusive licensee of Shell products in Australia. Their mission is to keep local industry moving, with Shell fuels, lubricants, chemicals, marine products and bitumen.
“Their expertise in hedging strategies and methodologies helped us drastically improve our internal hedge program.”
Gary Brown, Head of Finance
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