Financial strategy

Financing of Q-Free through debt and equity

The Q-Free Group’s strategy is to hold sufficient cash, cash equivalents or credit facilities at any time to be able to finance its operations and planned investments over the next three years. Surplus cash funds are deposited in banks or invested in money market funds, with the purpose of securing an acceptable, low-risk return on the invested capital. Q-Free runs tender processes with large Nordic banks to elect Corporate bank regularly, normally every 3-5 years.

The interest level has significant influence on the consolidated profit. To ensure predictability the Group has preferred short-term interest rates (NIBOR 3 months plus a small mark-up) on its debt. Deposits are linked to the same underlying rate to mitigate the risk related to changes in the NIBOR.

 Q-Free’s policy is to maintain a high equity ratio to provide a platform for the company’s future expansion and growth. However, if needed to finance these transactions, equity will be seeked to obtain through share issues if the Board of Directors decides that this would best take care of shareholders’ long-term interests. Normally, the Board of Directors will propose that share issues are directed to existing shareholders in accordance with their preferential rights. However, if the Board of Directors has been given an authorisation from the general meeting to carry out a private placement for a special purpose, it can be decided to waive the pre-emption rights of existing shareholders. The Board of Directors can also decide to call for a general meeting to decide on the share issue.

Currency policy

Q-Free has significant activity outside Norway in other currencies than Norwegian kroner, leaving Q-Free with a considerable exposure to foreign currencies. Q-Free runs businesses outside of Norway, and buys a substantial share of required equipment abroad. This mitigates the Group’s net foreign currency exposure significantly.

Q-Free’s policy is to limit currency risk while actively assessing various currencies’ importance as competitive parameters. The Group strategy is to compare estimated future sales and purchases and hedge the net cash flow in the foreign currency by using forward / future contracts.

Dividend policy

Q-Free ASA has an objective to give the shareholders a stable and competitive long-term return on investment through payments of dividends and a positive share price development. The company is in a growth phase and is seeking a good combination of investing the free cash flow in new business opportunities and distributing dividends to the shareholders