Exchange Rate Fluctuations Spread To European Domestic Enterprises

With the appreciation of the euro, domestic enterprises such as Adidas and Prada, which are mainly overseas businesses, are facing the risk of exchange.

In China, because of the appreciation of the RMB against the US dollar, airlines are enjoying huge profits from the exchange.

Data show that in the first half of this year, domestic airlines gained 4 billion 300 million yuan in exchange earnings, so they still maintained profits at the loss of 4 billion 100 million yuan in main business.

stay exchange rate Under this double-edged sword, some people are happy and sad.

　　 The heavy losses of Prada

At the end of 9, Miss Liu paid a sum of money to the credit card. To make her somewhat depressed, the money was a little more than expected. When she was traveling to Europe in early September, Miss Liu bought some personal belongings by credit card. "This credit card can only be repaid in Renminbi, and it can only be repaid after paying the bill, which will take 18 days." Liu Xiaojie said she could only see the euro exchange rate rising over the past ten days.

It is not just Liu Xiaojie who worries about the euro exchange rate.

　　 Adidas The annual profit forecast for 2013 was down to 7.9%, mainly because of the strong euro exchange rate. Statistics show that nearly 73% of Adidas's revenue comes from outside Western Europe.

　　 Prada The situation is similar to that of Adidas. Prada recently disclosed that in the first half of fiscal year 2014, the net profit of the company was 308 million 200 thousand euros. This figure is significantly lower than analysts had expected. According to the relevant agencies, in the second quarter ended July, Prada's foreign exchange loss was 5 million 830 thousand euros, a new high in two years.

Under the background of the appreciation of the euro, some European enterprises with overseas business are facing the risk of exchange.

JP Morgan made a downward adjustment of about 3% of Adidas's profit forecast in 2013, and believed that the stronger exchange rate of the euro would be the main reason. Citigroup analysts said in a report that Adidas's net profit forecast could drop by 9% to 10%.

Exchange risk is the risk that every business with overseas business needs to face. It is unpredictable and often causes the enterprise to suffer "unresistable" losses.

The most typical example is from SONY, Japan. In 2011, as the devaluation of the euro and the yen went far beyond expectations, a great deal of SONY's exports to Europe were seriously affected. Some commentators describe this as saying, "after a hard half year, the result is that the exchange rate has changed, and we have not made any money."

　　 Companies that were "dismal" because of exchange rates.

In addition to the experience of SONY, there has been no shortage of people who suffered from the "disaster" of exchange rate.

In July 30th this year, a "performance correction" issued by Yanzhou coal industry shocked the market. The company's performance forecast for the first half of the year turned from a profit of about 1 billion 20 million yuan to a loss, with a loss of 2 billion 350 million yuan.

In 2009, Yanzhou coal invested 3 billion 333 million Australian dollars to acquire Australian mining company Felix, becoming China's largest acquisition in Australia. Secretaries of the company said that the acquisition fund was borrowed from the bank in the form of the US dollar, which was equivalent to about 3 billion dollars at the prevailing exchange rate. In addition, Yanzhou coal company also provided loans to Yanzhou Coal by means of entrusted loans and so on. At present, the total loan amount of Yanzhou Coal Australia is about 4 billion 500 million US dollars.

In the second quarter of this year, the exchange rate of the Australian dollar against the US dollar dropped from 1.04 to 0.90, with a change of about 10%. In accordance with the scale of US $4 billion 500 million, the exchange loss was 450 million US dollars, equivalent to about 2 billion 700 million yuan.

In the event of huge exchange losses in Yanzhou coal industry, some foreign exchange experts pointed out that this matter exposes the risk of financial management in Yanzhou coal industry. "When the US dollar loan comes in early, enterprises can lock in risk through financial derivatives."

In addition to the recent Yanzhou coal industry, there was a huge loss of CITIC Pacific.

In October 20, 2008, CITIC Pacific, Hongkong's Hang Seng stock index, suddenly burst a huge exchange loss of HK $15 billion 500 million.

Before the collapse of Lehman in 2008, the Aussie dollar was 0.9 against the US dollar, and the Aussie dollar was widely valued and appreciated in the market. So CITIC Pacific became a multi Australian dollar then. Finally, the Australian dollar fell to 0.6, causing huge exchange losses.

　　 Airline exchange earnings "make up" main business losses

Not only is the euro stronger. Since the reform of RMB exchange rate in 2005, the RMB has maintained a long-term appreciation against the US dollar.

Airlines that need to import are happy because of the rising renminbi, while exporters are suffering from the problem of exchange rate.

For domestic airlines, in the first half of last year, there was a rare depreciation of the renminbi, and the loss of exchange resulted in poor overall performance. In the first half of this year, the RMB returned to its orbit of appreciation. The four major airlines' earnings in the first half of this year, without exception, appeared very attractive exchange earnings, and again contributed to the company's profitability.

According to the financial report, in the first half of this year, Air China achieved a net profit of 1 billion 119 million yuan, an increase of 7.31% over the same period last year. Among them, the exchange earnings figure is exactly 1 billion 119 million yuan. Air China, which had a net profit of 1 billion 62 million yuan in the first half of last year, had a net loss of 341 million yuan. That is to say, the balance of exchange disguised the negative growth of net profit of Air China, and dressed up the report.

In response, Li Lei, deputy director of the National Securities Research Institute of the aviation industry for many years, told reporters that although the exchange earnings of Air China were comparable to net profit figures, it could not be directly explained that exchange earnings contributed all profits. But it is undeniable that "the appreciation of the renminbi really contributed most of the profits."

Apart from Air China, Eastern Airlines, China Southern Airlines and Hainan Airlines are also similar.

Data show that China Eastern Airlines net income in the first half of 1 billion 174 million yuan, net profit of 763 million yuan. If the exchange is excluded, the main business losses of China Eastern Airlines can be seen after simple calculation. China Southern Airlines had a net income of 1 billion 435 million yuan in the first half of this year, with a net profit of only 302 million and a loss of main business. HNA had a net income of 329 million yuan in the first half of this year, a net profit of 645 million, and a nearly half profit from the exchange.