Triple Point Technology®, the leading global provider of multi-market commodity and enterprise risk management software solutions, announced today that RWE, the biggest power producer in Germany, has chosen Triple Point’s Commodity XL for Hedge Accounting™ to assist in ensuring compliance with IAS 39 and help to protect against earnings volatility.
RWE joins the impressive ranks of Unit Corporation (NYSE: UNT), Beryl Oil & Gas and Enterprise Systems (NYSE: EPD) in its selection of Triple Point’s dynamic hedge accounting solution. From market pricing and effectiveness testing to documentation and flexible report generation, the Triple Point solution allows organizations to alleviate compliance risk, optimize hedging strategies, streamline regulatory reporting and reduce earnings volatility.
Headquartered in Essen, Germany, with large operations in the UK, RWE recorded £42.5 billion in revenue for fiscal year 2007. One of Europe’s five largest electricity and gas companies, RWE’s 63,500 employees supply 20 million customers with electricity and 10 million clients with gas. Active in the generation, transmission, sale and trading of electricity and gas, RWE continues to expand its position in Central and South-Eastern Europe.
RWE uses financial derivatives to hedge price movements in power, natural gas and coal and must comply with International Accounting Standards (IAS) 39 to receive beneficial hedge accounting treatment. A subsidiary of RWE, RWE Supply and Trading GmbH, sought hedge accounting software to ensure continued and effective control over its hedge accounting procedures given the extensive and detailed requirements presented by IAS 39.
“RWE considered several platforms to best address our hedge accounting, reporting and IAS 39 compliance requirements,” said Mick Axtell, head of finance UK, RWE Supply & Trading GmbH. “RWE requires a proven hedge accounting system to help avoid misleading and unnecessary earnings volatility. Triple Point’s mature hedge accounting solution, along with its team’s subject matter expertise, made it the best choice for RWE.”
"The strict regulatory guidelines of IAS 39 in Europe and FAS 133 in the United States, coupled with increased derivative volatility, means that organizations using spreadsheets in an attempt to comply with hedge accounting standards are at risk of failed audits, large earnings swings and missed financial forecasts," said Elie Zabal, SVP, treasury and regulatory compliance division, Triple Point. "Our real-time hedge accounting system enhances hedging capability, reduces earnings volatility, alleviates compliance risk and streamlines regulatory disclosure.”
Triple Point’s hedge accounting system is based on mature, well-tested software solutions obtained in its acquisition of INSSINC. INSSINC, now the treasury and regulatory compliance division of Triple Point, serves premiere energy and commodity industry leaders throughout North America and Europe including such notable companies as: PacificCorp, TransAlta, TransCanada, SUEZ Energy, Southern Company, Ameren Energy, PPL Corporation (Pennsylvania Power & Light), Scottish Power and Campbell Soup Company.
