Risks and uncertainty factors
The FM Mattsson Mora Group’s operations are exposed to operating and strategic risk, as well as financial risk. Operating and strategic risks include business and liability risk and financial risk includes liquidity, interest rate and currency risk. FM Mattsson Mora Group continuously seeks to identify and assess the risks the company is exposed to.
One of the key operating risks FM Mattsson Mora Group has identified is the risk exposure to the metals copper and zinc, which are raw materials for the alloy, brass. Some one-third of FM Mattsson Mora Group’s total expenses for direct materials consist of brass metal input into works-made and purchased components.
Risk management for commodity prices addresses avoiding speculative risks and creating predictability. For FM Mattsson Mora Group’s own requirements of brass, this is achieved through short-term agreements and ongoing financial hedges. For purchased components, FM Mattsson Mora Group seeks to secure contracts with a low frequency of price changes.