Company: GHRS
Filing Date: 2025-02-27
Form Type: 20-F
Source: 0001140361-25-006175
Chunk: 5

Company: GH Research PLC
Filing Date: 2025-02-27
Form: 20-F
Item: Item 11
Chunk 5
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 internationally and are exposed to foreign exchange risk arising from various currency exposures, primarily with respect to U.S. dollar, euro and pounds sterling.
 
Transaction exposure arises because the amount of local currency paid or received in transactions denominated in foreign currencies may vary due to changes in exchange rates. Foreign exchange risk arises from:

•   forecast expenses denominated in a currency other than the entity’s functional currency; and
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•   recognized assets and liabilities denominated in a currency other than the entity’s functional currency.
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Our cash and cash equivalents, other financial assets and marketable securities are predominantly maintained in U.S. dollar and we are exposed to foreign exchange risk in our subsidiary as its functional currency is euro. Our subsidiary holds significant cash deposits and other financial assets denominated in U.S. dollar. Accordingly, future changes in the exchange rates of euro and the U.S. dollar will expose the Group to currency gains or losses that will impact the reported amounts of income and expenses and the impact could be material.
 
For the year ended December 31, 2024, we recognized a foreign exchange gain of $2.1 million, compared to a foreign exchange loss of $2.6 million for the year ended December 31, 2023. The foreign exchange gain was primarily due to the strengthening of the U.S. dollar versus the euro in the year which results in a gain on the translation of the U.S. dollar cash and other financial assets holding of our subsidiary. Movement in foreign exchange rates could positively or negatively impact us and the effect could be material.
 
We do not believe there is currently a need to enter into specific contracts to reduce the exposure to changes in foreign exchange rates, such as by entering into options or forward contracts. We may in the future consider using options or forward contracts to manage currency transaction exposures.
 
At December 31, 2024, if the U.S. dollar had weakened / strengthened by 10% against the euro with all other variables held constant, the loss before tax for the year would have been $2.3 million higher / lower compared to $6.4 million higher/lower at December 31, 2023, mainly due to the translation of cash and other financial assets held in U.S. dollar in our subsidiary, GH Research Ireland Limited, whose functional currency is euro.
 
Credit Risk
 
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. We are primarily exposed to