logo di stampa inglese
You are in: Further info » Risk Management

Risk Management

Once again in 2011, the operational management of commodity and foreign exchange risk was carried out on a “hedging” basis, aimed at establishing the Budget margins for the commercial operations conducted in the Gas and Electricity areas by both Hera Trading and Hera Comm.

From an organisational point of view, the activities are centralised within Hera Trading, respectively in the Gas Area Risk Management function for hedging on the fuels and foreign exchange front, and in the Electricity Market function for hedging relating to electricity contracts not index-linked to fuels.

This approach, based on the creation of a Fuels Concentration Portfolio and an Electricity Concentration/Trading Portfolio, without producing any duplication of responsibilities, allowed unified management of the homogeneous risks of both Hera Trading and Hera Comm, and, in relation to the first portfolio, on the basis of macro-hedging rather than by formulas, made it possible to obtain clear benefits such as:

  • Achievement of very high hedging levels;
  • Removal of the constraint on the minimum volumes which can be hedged;
  • Optimisation of costs for the reduced recourse to the market through netting of the positions of the individual contracts and of the positions generated by the Gas and Electricity areas;
  • Greater flexibility in the evaluation of procurement contracts with non-standard indexing formulas;
  • Greater flexibility in the structuring of the offer, with the ability to propose/quote indexing formulas other than those present in the acquisitions portfolios;
  • Greater visibility of OTC commodity prices.


The activity carried out within the context of the Concentration Portfolio, on the basis of derivative financial instruments, although carried out exclusively for hedging purposes, does not satisfy the requirements of IAS 39 for the application of Hedge Accounting. It follows from this that the returns obtained and the projected value of the derivatives in the portfolio (Fair Value Delta) are included in the operating income of the Gas Area.

Credit risk represents the exposure of Hera Trading to potential losses caused by non-fulfilment of the obligations assumed by counterparties, particularly in relation to the growing commercial activity of gas and electricity sales.

The Credit Control and Management Policy relating to the commercial counterparties of the Electricity Area became fully operational in January 2010, while that relating to the counterparties of the Gas Area came into operation during the course of 2011.

These measures are aimed at controlling this type of risk, which has become increasingly important with the current worsening of the economic crisis.

These Policies, defined by the Energy Risks Analysis and Control Department of Hera S.p.A. in collaboration with Hera Trading, were approved by the Energy Risks Committee on 1 December 2009 and 25 November 2011, respectively.