| Derivative financial Instruments |
24.Derivative financial instruments The Group’s operations are in various foreign currencies and consequently are exposed to foreign currency risk. As a consequence, the Group uses derivative instruments, delivery and non-delivery currency forward contracts and future contracts, to reduce the volatility of earnings and cash flows, caused by the exchange rate variation in which dLocal is exposed on the conversion of local currency into the settlement currency (usually US dollars). All outstanding derivatives are recognized in the Group’s consolidated balance sheets at fair value and the impacts are recognized on profit or loss, as shown on the tables below. The Group uses foreign exchange forward contracts to manage some of its transaction exposures. The spot element of foreign exchange forward contracts is designated as hedging instruments in fair value hedges and are entered into for periods consistent with foreign currency exposure of the underlying transactions, generally from one to 12 months.
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Transaction |
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Type Contract |
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Notional amount in USD as of December 31, 2024 |
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Outstanding balance as of December 31, 2024 - Derivative financial assets / (liabilities)" |
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Outstanding notional amount as of December 31, 2023 |
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Outstanding balance as of December 31, 2023 - Derivative financial assets / (liabilities) |
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Assets |
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Buy EUR |
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US Dollar |
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Futures Contract |
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— |
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— |
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29,114 |
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480 |
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Buy USD |
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Mexican Peso |
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Futures Contract |
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9,780 |
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287 |
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— |
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— |
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South African Rand |
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Futures Contract |
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13,870 |
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727 |
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— |
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— |
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Mexican Peso |
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Forward |
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9,899 |
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256 |
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— |
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— |
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Moroccan Dirham |
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Forward |
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4,482 |
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35 |
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— |
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— |
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South African Rand |
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Forward |
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26,961 |
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749 |
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— |
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— |
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Brazilian Real |
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Non-delivery forwards |
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17,682 |
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378 |
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Indian Rupee |
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Non-delivery forwards |
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176 |
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1 |
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— |
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— |
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Argentine Peso |
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Non-delivery forwards |
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— |
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— |
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3,400 |
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7 |
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Egyptian Pound |
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Non-delivery forwards |
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— |
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— |
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20,865 |
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1,479 |
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Sell EUR |
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US Dollar |
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Futures Contract |
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(18,065 |
) |
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152 |
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— |
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— |
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Sell USD |
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South African Rand |
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Forward |
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— |
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— |
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(2,345 |
) |
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12 |
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Argentine Peso |
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Futures Contract |
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(1,000 |
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252 |
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— |
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— |
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Brazilian Real |
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Non-delivery forwards |
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(7,707 |
) |
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37 |
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— |
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— |
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Peruvian Sol |
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Non-delivery forwards |
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— |
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— |
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(1,252 |
) |
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62 |
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Total |
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2,874 |
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2,040 |
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Liabilities |
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Buy EUR |
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Moroccan Dirham |
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Forward |
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— |
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— |
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1,490 |
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(51 |
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US Dollar |
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Forward |
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3,383 |
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(13 |
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— |
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— |
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US Dollar |
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Futures Contract |
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39,223 |
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(547 |
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— |
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— |
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Buy USD |
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Chilean Peso |
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Forward |
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15,979 |
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(29 |
) |
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— |
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— |
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United Arab Emirates Dirham |
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Forward |
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133 |
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(0 |
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— |
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— |
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South African Rand |
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Forward |
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— |
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— |
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8,128 |
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(230 |
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Saudi Riyal |
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Forward |
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6,755 |
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(11 |
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— |
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— |
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Moroccan Dirham |
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Forward |
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— |
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— |
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6,263 |
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(240 |
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Uruguayan peso |
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Forward |
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5,392 |
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(71 |
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— |
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— |
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Argentine Peso |
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Futures Contract |
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1,900 |
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(232 |
) |
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— |
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— |
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Brazilian Reais |
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Non-delivery forwards |
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— |
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— |
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3,715 |
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(30 |
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Chilean Peso |
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Non-delivery forwards |
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— |
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— |
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19,874 |
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(174 |
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Uruguayan Peso |
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Non-delivery forwards |
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— |
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— |
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2,552 |
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(48 |
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Indian Rupee |
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Non-delivery forwards |
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— |
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— |
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2,397 |
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(7 |
) |
Peruvian Sol |
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Non-delivery forwards |
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— |
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— |
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1,200 |
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(67 |
) |
Vietnamese Dong |
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Non-delivery forwards |
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6,334 |
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(7 |
) |
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4,054 |
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(32 |
) |
Argentine Peso |
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Non-delivery forwards |
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37,200 |
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(4,968 |
) |
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— |
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— |
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Nigerian Naira |
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Non-delivery forwards |
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2,000 |
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(33 |
) |
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— |
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— |
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Egyptian Pound |
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Non-delivery forwards |
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8,965 |
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(96 |
) |
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— |
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— |
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Sell EUR |
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Moroccan Dirham |
|
Forward |
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— |
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— |
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(3,274 |
) |
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(28 |
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US Dollar |
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Non-delivery forwards |
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— |
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— |
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(6,323 |
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(40 |
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Sell USD |
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Indian Rupee |
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Non-delivery forwards |
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— |
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— |
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(950 |
) |
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(1 |
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South African Rand |
|
Forward |
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(6,654 |
) |
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(104 |
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— |
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— |
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South African Rand |
|
Futures Contract |
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(6,662 |
) |
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(116 |
) |
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— |
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— |
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Total |
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(6,227 |
) |
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(948 |
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2024 |
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2023 |
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2022 |
Net gain on foreign currency forwards recognized in ‘Costs of Services’ (Note 6) |
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13,461 |
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17,433 |
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14,559 |
Net loss on foreign currency forwards recognized in ‘Finance Costs’ (Note 11) |
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(19,462) |
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(28,013) |
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(18,763) |
(i) Classification of derivatives Derivatives are financial instruments entered into only for economic hedging purposes and not contracted as speculative investments. However, where derivatives do not meet the hedge accounting criteria, they are classified as ‘held for trading’ for accounting purposes and are accounted for at fair value through profit or loss. The full fair value of hedging derivatives is classified as a non-current asset or liability when the remaining maturity of the hedged item is more than 12 months, otherwise they are classified as a current asset or liability. Derivatives held for trading are classified as a current asset or liability.
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