Woodside Petroleum Ltd|Financial Statements 107
In this section
This section addresses financial performance of the Group for the reporting period including, where applicable, the accounting policies
applied and the key estimates and judgements made. The section also includes the tax position of the Group for and at the end of the
reporting period.
A. Earnings for the year
A.1 Segment revenue and expenses Page 108
A.2 Finance costs Page 110
A.3 Dividends paid and proposed Page 110
A.4 Earnings per share Page 110
A.5 Taxes Page 110
Key financial and capital risks in this section
Commodity price risk management
The Group’s revenue is exposed to commodity price fluctuations. Commodity prices are measured by monitoring and stress testing
the Group’s forecast financial position to sustained periods of low oil and gas prices. This analysis is regularly performed on the Group’s
portfolio and, as required, for discrete projects and acquisitions.
As at the reporting date, the Group had no financial instruments with material exposure to commodity price risk.
Foreign exchange risk management
Foreign exchange risk arises from future commitments, financial assets and financial liabilities that are not denominated in US dollars.
The majority of the Group’s revenue is denominated in US dollars. The Group is exposed to foreign currency risk arising from operating and
capital expenditure incurred in currencies other than US dollars, particularly Australian dollars.
Measuring the exposure to foreign exchange risk is achieved by regularly monitoring and performing sensitivity analysis on the
Group’s financial position.
A reasonably possible change in the exchange rate of the US dollar to the Australian dollar (+12%/-12% (2017: +12%/-12%)), with all other
variables held constant, would not have a material impact on the Group’s equity or the profit or loss in the current period. Refer to Notes
C.1, C.2, D.1 and D.3 for detail of the denomination of cash and cash equivalents, interest-bearing liabilities, receivables and payables held at
31 December 2018.
In order to hedge the foreign exchange risk and interest rate risk (refer to Section C) of a Swiss Franc (CHF) denominated medium-term
note, Woodside holds a number of cross-currency interest rate swaps (refer to Note C.2). The aim of this hedge is to convert the fixed
interest CHF bond into variable interest US dollar debt.
for the year ended 31 December 2018