24. Financial instruments and financial risk management

24.1 Derivative financial instruments and hedging

The Group's risk management uses derivative financial instruments that predominantly serve the purpose of hedging price and interest rate risks. The accounting of these derivative financial instrument applies – in as far as hedging transactions are concerned and the criteria are met – the cash flow hedge and fair value hedge accounting methods.

The use of derivative financial instruments in the Group is subject to corresponding authorisation and control procedures. Proprietary trading is only carried out within very tightly defined limits.

Interest rate swaps are used for hedging future variable interest payments on funding and leasing contracts as well as highly probable funding in the future. Energie AG Group hedges these by purchasing interest rate swaps that correspond to the hedged item in terms of the base interest rate, payment dates, interest rate fixing date, nominal amounts and maturities. As their essential parameters concur, a commercial relationship between the hedged item and the hedging transaction can be affirmed. Hedges may be ineffective in the case of changes in the counterparty's and Energie AG's credit risk, as well as in cases where the measurement-relevant parameters differ from the hedged item and hedging transaction. The qualitative and quantitative effectiveness of a hedge is determined on the basis of the hypothetical derivatives method.

Futures and forwards are used to hedge price-related risks from electricity procurement and electricity sales. The objective of Energie AG Group is to hedge the price risk using derivative and non-derivative financial instruments and thereby reduce the cash flow risk from electricity purchasing and sales and/or the fair value risk from firm commitments. This means that only a portion of the total volume is hedged using derivative financial instruments. Hedging is carried out on a rolling basis. Either the entire price risk is hedged, or only a component of the risk. The commercial relationship results either from almost identical parameters of hedged item and hedging transaction (in particular base price, performance, term and price base), or the high correlation of prices in different market price zones in cases where only a component is hedged. A hedging ineffectiveness may result from temporal differences, price differences, different market price zones or the counterparty's credit risk. The qualitative and quantitative effectiveness of a hedge is determined on the basis of the hypothetical derivatives method.

Futures are used to hedge price risks from gas purchases and gas sales. The hedging aims at reducing the cash flow risk or fair value risk from firm commitments. The hedging volume is determined on the basis of the hedging strategy. Only a portion of the purchases and sales are hedged using derivative instruments. The commercial relationship either results from almost identical parameters (in particular volume, price and term), or from the high correlation of prices if the hedged item and the hedging transaction have a different price base. A hedging ineffectiveness may result from temporal differences, price differences, different market price zones or the counterparty's credit risk. The qualitative and quantitative effectiveness of a hedge is determined on the basis of the hypothetical derivatives method.

Futures are used to hedge procurement and sales of CO₂ emissions allowances. The hedging aims at reducing the cash flow risk. Only a portion of the total volume is hedged on the basis of the hedging strategy. The commercial relationship results from almost identical parameters (in particular volume, price and term). Ineffective hedges may result from temporal differences or the counterparties' credit risk. The qualitative and quantitative effectiveness of a hedge is determined on the basis of the hypothetical derivatives method.

Beyond that, gas-oil-swaps are concluded to hedge the price risks of purchasing fuel. The objective is to reduce the cash flow risk from fuel purchases. The hedging volume results from the hedging strategy and concerns only a portion of the fuel purchases. The commercial relationship is established on the basis of the parameters quantity, term and the evidence for the correlation of the prices of the hedged item and the hedging transaction. Ineffective hedges may result from temporal differences, price differences and the counterparties' credit risk. The qualitative and quantitative effectiveness of a hedge is determined on the basis of the hypothetical derivatives method.

The spark-spread risk from Gas- und Dampfkraftwerk Timelkam GmbH (CCGT power plant) and Cogeneration-Kraftwerke Management Oberösterreich GmbH (CMOÖ) is hedged using electricity, gas and CO₂ derivatives.

Hedging instruments associated with the Timelkam CCGT and CMOÖ (hedging for the procurement of gas and CO₂ emissions allowances, sale of electricity) are presented as positive or negative market values without hedge FVPL (see Note 24.4). The result is reported in the Statement of Income under a separate item entitled ‘Assessment of energy derivatives’ (see Note 24.11).

The Group holds fair value hedges for firm commitments relating to gas procurement and supply transactions.

Cash flow hedges are used to protect future cash flows. The Group also uses electricity futures and forwards, gas and CO₂ futures, as well as gas and gas-oil swaps, to hedge price risks; interest rate swaps are used to hedge the cash flow risks of variable-interest liabilities and highly probable funding in the future.

The cash flows from hedging transactions in the amount of EUR 17.4 million (previous year: EUR -133.1 million) included in the cash flow statement mainly comprise margins from electricity, gas and CO₂ futures as well as cash flows from collateral annexes. The non-cash items from derivatives amounting to EUR -65.5 million (previous year: EUR -114.6 million) include amounts reclassified from the cash flow hedge reserve as the hedged item affected profit or loss, amounts arising from the measurement of fair value hedges, and non-cash items from derivatives not designated as hedging instruments. The collateral for derivatives in the amount of EUR 1.2 million (previous year: EUR 48.9 million) is cash and cash equivalents that had to be deposited as collateral for stock exchange transactions.

24.2 Disclosures on hedging transactions

24.2.1 Cash flow hedges

For cash flow hedges, the carrying amounts, nominal amounts and changes in fair values for the reporting period used for recognising an ineffective hedge are as follows:

If not yet cleared, the positive fair values of the derivatives are reported under assets in the non-current and current item ‘Derivative financial instruments’, while negative fair values, if not yet cleared, are reported under liabilities in the non-current and current item ‘Derivative financial instruments’ (see Note 24.5).

The nominal values and average hedging prices for cash flow hedges are as follows:

The above reporting of derivatives is broken down by calendar year in which these fall due.

24.2.2 Fair value hedges

For fair value hedges, the carrying amounts, nominal amounts and changes in fair values for the reporting period used for recognising an ineffective hedge are as follows:

If not yet cleared, the positive fair values of the derivatives are reported under assets in the non-current and current item ‘Derivative financial instruments’, while negative fair values, if not yet cleared, are reported under liabilities in the non-current and current item ‘Derivative financial instruments’ (see Note 24.5).

24.3 Disclosures on hedged items and the reserve for cash flow hedges

The carrying amounts of the hedged items in fair value hedges, the reserve for cash flow hedges and the change in the fair value for the determination of ineffective cash flow hedges and fair value hedges for the reporting period are as follows:

The development of the reserves for cash flow hedges is as follows:

24.4 Disclosures on derivatives not designated as hedging instruments

The Energie AG Group holds the following derivatives that are not designated as part of any hedging relationship:

24.5 Carrying amounts in accordance with IFRS 9

In accordance with IFRS 9 or IFRS 16, the carrying amounts of financial assets and liabilities are grouped into classes or measurement categories as follows:

The positive and negative long-term and short-term market values of the balance sheet item ‘Derivative financial instruments’ are divided up as follows:

Cash flow hedges and fair value hedges are concluded in particular to hedge price change and interest rate change risks of hedged items. Derivatives not used for hedging are largely closed positions, with the criteria for hedge accounting according to IFRS 9 not being fulfilled. These positive and negative market values do not include futures, as these are cleared with daily margin payments.

As of 30 September 2025, the Energie AG Group holds shares in affiliated companies and other investments in the amount of EUR 70,132.1 thousand (previous year: EUR 97,164.4 thousand), as well as securities (stocks) in the amount of EUR 13,381.8 thousand (previous year: EUR 10,834.5 thousand) classified as ‘Financial Assets Through Other Comprehensive Income (FVOCI)’. These investments are held for long-term, strategic purposes. For fiscal year 2024/25, the dividends distributed for securities amount to EUR 287.7 thousand (previous year: EUR 407.0 thousand). Dividends distributed for investments amount to EUR 7,197.2 thousand (previous year: EUR 8,334.8 thousand).

In the 2024/25 fiscal year and in the previous year, no investments or securities were sold.

24.6. Offsetting of financial assets and liabilities

The following table shows the effect of netting agreements:

At the Energie AG Oberösterreich Group, the derivative financial instruments and receivables/payables presented above are concluded on the basis of standard agreements (e.g. ISDA, EFET, German Master Agreement for Financial Derivative Transactions), which, in the event of insolvency of a business partner, permit the offsetting of outstanding transactions. The criteria for netting in the statement of financial position are not met, because either no net payments are being made or the legal enforceability of the netting agreements is uncertain.

24.7 Measurement at fair value

24.7.1 Fair value of financial assets and liabilities that are measured regularly at fair value

Pursuant to IFRS 13, financial instruments that are measured at fair value are classified within a fair value hierarchy. In view of possible uncertainties relating to possible estimates of the fair values, a distinction is made between three levels:

Level 1: Measurement on the basis of a published price quotation for identical assets or liabilities in an active market.

Level 2: Measurement on the basis of inputs that are observable either directly or indirectly in the market and measurements based on prices quoted in inactive markets.

Level 3: Measurement on the basis of inputs not observable in the market.

If the inputs used to determine the fair value of an asset or liability are attributable to different levels of the fair value hierarchy, the measurement at fair value is wholly assigned to the fair value hierarchy level that corresponds to the lowest input which, in the aggregate, is material for the measurement.

The financial instruments measured at fair value are assigned to levels 1 to 3:

Level 3 financial instruments developed as follows:

The (losses) gains recognised outside profit or loss include the impairment (previous year: reversal of impairment) of the investment in Verbund Hydro Power GmbH in the amount of EUR -29,348.5 thousand (previous year: EUR 18,306.4 thousand). The fair value of the investment (0.42%) of EUR 56,256.8 thousand (30 September 2024: EUR 85,605.3 thousand) was determined on the basis of expected future distributions and a discount rate of 7.08% (previous year: 7.14%). The decrease (previous year: increase) in fair value is mainly attributable to lower (previous year: higher) expected distributions.

The total (losses) gains recognised outside profit or loss amounting to EUR -28,205.4 thousand (previous year: EUR 18,035.6 thousand) were recognised in other comprehensive income under ‘Change in the fair value of investments and securities (FVOCI)’.

An increase (decrease) of 25% in the assumed cash flows would have resulted in an increase (decrease) in the other comprehensive income of EUR 12,497.2 thousand (EUR -12,497.2 thousand) (previous year: EUR 17,603.0 thousand (EUR ‑17,603.0 thousand)). A 50-basis-point increase (decrease) in the discount rate would have decreased (increased) OCI by EUR -3,461.5 thousand (EUR 4,179.6 thousand) (previous year: EUR -2,356.2 thousand (EUR 2,470.8 thousand)).

24.7.2 Valuation techniques and inputs used in measuring fair values

In general, the fair values of the financial assets and liabilities correspond to their market prices on the reporting date. If active market prices are not directly available, then – if they are not of minor significance – they are calculated using recognised actuarial measurement models and current market parameters (in particular interest rates, exchange rates and the credit rating of contractual partners). This is done by discounting the cash flows from the financial instruments to the reporting date.

The following valuation parameters and inputs were used:

24.7.3 Fair values of financial assets and liabilities that are not measured regularly at fair value, however for which the fair value must be disclosed

The items trade receivables, receivables from affiliated companies, receivables from joint arrangements and associated companies, other financial assets, as well as fixed term deposits and current investments are characterised by predominantly short remaining terms. This means that their carrying amounts as of the reporting date roughly represent their fair value. If they are material and have a fixed interest rate, then the fair value of non-current lendings corresponds to the present value of the payments associated with the assets, taking into consideration the current market parameters in each case (interest rates, credit spreads).

Trade payables, liabilities to affiliated companies, liabilities to joint arrangements and associated companies and other financial liabilities usually have short remaining terms. The values on the balance sheet are approximately the fair values. If they are material and bear interest at a fixed rate, the fair value of financial liabilities is determined using the present value of the payments associated with the liabilities, taking into consideration the respectively applicable market parameters (interest rates, credit spreads).

The following financial assets and liabilities have a fair value different from the carrying amount:

The fair values of the Level 3 financial assets and liabilities disclosed above were determined in agreement with generally accepted valuation techniques based on discounted cash flow analyses. Material input is the discount rate, which takes into account the expected credit loss of the counterparty.

24.8 Net result

The net result from financial instruments is grouped in the different classes of financial instruments as follows:

The net result for the category Financial Assets at Amortized Cost (AC) mainly includes interest income from invested money and is recognised in the financial result. This item also includes income from the reversal of impairments and expected credit losses, income from the receipt of receivables that had previously been written off, as well as expenses from impairments, expected credit losses and write-offs for trade receivables recognised in the operating result.

The net result of the category Financial Assets at Fair Value through Other Comprehensive Income (FVOCI) shows the measurement result for the investments and securities measured outside of profit or loss. Income from investments and dividends from securities are reported in the other financial result.

The net result of the category Financial Assets at Fair Value through Profit or Loss (FVPL) mainly includes earnings from remeasurement and earnings from disposals, as well as dividends from securities and income from the remeasurement of funds and is shown in other financial result.

The net result of the category Financial Assets at Fair Value Trading through Profit or Loss (FVPL) and Financial Liabilities at Fair Value Trading through Profit or Loss (FVPL) essentially results from the derivatives used by Energie AG. The measured value of derivative instruments in the Energy Segment is recognised in the operating result.

The net result of the category Financial Liabilities at Amortized Cost mainly includes interest expenses from financial liabilities and is part of the financial result.

24.9 Financial risk management

24.9.1 Principles of financial risk management

Due to its business activities and the financial transactions it conducts, the Energie AG Group is exposed to various risks. These risks primarily include currency and interest rate risks, liquidity risks, expected credit loss, price risks from securities, and price risks in the commodity sector (energy sector price risks).

Energy-industry risk management is carried out by Energie AG Oberösterreich Trading GmbH, while financial risk management is performed centrally by the Group Treasury. Any hedging is executed centrally for all Group companies. Hedging against energy sector risks is handled on the basis of an internal policy on conducting energy sector hedging transactions. A financial management guideline for the Group (Treasury Policy), in which the main goals, principles and distribution of duties in the Group are set out, serves as a basis for the management of financial risks.

Hedging against energy sector and financial risks is also handled using derivative financial instruments. Transactions of this type are on principle only carried out with counterparties with very good credit ratings in order to minimise the risk of default.

24.9.2 Foreign exchange risk

The foreign exchange risks in the Energie AG Group result from funding provided in foreign currencies and the translation risk from the conversion of foreign Group companies into the Group currency (Czech Republic and Hungary).

For the foreign exchange risk of financial instruments, sensitivity analyses were carried out which show the effects of hypothetical changes in exchange rates on result (after taxes) and equity. The affected holdings as of the reporting date were used as a basis (CZK 82.1 million, HUF 2.7 billion), (previous year: CZK 7.4 million, HUF 2.7 billion). It was assumed that the risk at the reporting date essentially represents the risk prevailing during the fiscal year. A tax rate of 23% was applied. Furthermore, the analysis was carried out on the assumption that all other variables, in particular interest rates, remain constant. In the analysis, the currency risks for financial instruments that are denominated in a currency different from the functional currency and are of a monetary nature were included. Differences resulting from the exchange rate in translating financial statements into the Group currency were not taken into consideration.

Following the aforementioned assumptions, an upward revaluation of the Euro by 10% against all other currencies on the reporting date would result in lower earnings (after taxes) by EUR 503.4 thousand (previous year: EUR 495.3 thousand) and a reduction in equity by EUR 300.0 thousand (previous year: EUR 495.3 thousand). In this case, the sensitivity of equity, as well as the sensitivity of earnings (after taxes), was affected by the sensitivity of the exchange-rate-related cash flow hedge reserve in the amount of EUR 203.4 thousand (previous year: EUR 0.0 thousand).

Following the aforementioned assumptions, a write-down of the Euro by 10% against all other currencies on the reporting date would result in increased earnings (after taxes) by EUR 615.2 thousand (previous year: EUR 605.3 thousand) and an increase in equity by EUR 340.8 thousand (previous year: EUR 605.3 thousand). In this case, the sensitivity of equity, as well as the sensitivity of earnings (after taxes), was affected by the sensitivity of the exchange-rate-related cash flow hedge reserve in the amount of EUR -274.4 thousand (previous year: EUR 0.0 thousand).

24.9.3 Interest rate risk

The Energie AG Group holds interest rate-sensitive financial instruments in order to meet the requirements of operational and strategic liquidity management. Interest rate change risks mainly result from financial instruments with variable interest rates (cash flow risk). Interest rate risks result in particular from: