The latest quarterly report from Fireapps shows that currency headwinds for those corporations that reported them fell to $6.7 billion in Q1 2017 – mainly thanks to North American firms reporting a $6.47 billion negative currency impact on earnings. This compares to a collective $16.88 billion hit in Q1 2016, the firm says.
Fireapps analyses the earnings calls of 1200 publicly traded North American and European companies and says the companies included in the dataset are large multinational firms with at least 15% international revenues in at least two currencies.
For many corporate treasurers, deciding what products to use in order to hedge their FX exposures is the easy part of the job. The hard part is working out exactly what their FX exposures are. Galen Stops reports.
When it comes to effectively hedging FX exposures, it seems that the biggest challenge facing corporate treasurers is simply getting an accurate view of what these exposures are.
“Getting a centralised view of our FX exposures is very difficult. It’s always an issue, it’s something that we work on constantly and we’ll probably never get to the point where we have a perfect view on this,” says a source at one European corporate with revenues over $22 billion.
FiREapps, a firm that provides technology to corporates that enables them to automate the analysis and management of currency data and exposures, has expanded its software offering from currency risk management to enterprise currency management (ECM).
ECM solutions enable treasury and finance professionals to assess, mitigate and report currency impacts on corporate financial statements and results.
But FiREapps says that what is more important than this is that the latest ECM solutions give financial planning and analysis (FP&A), supply chain and other finance professionals access to a common currency data platform that can be used to help avoid currency impacts, set and manage expectations of how currencies impact the business and make it easier to quickly and confidently answer currency-related questions from stakeholders.