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Controlled risk taking essential for good profitability

RISK MANAGEMENT – AN INTEGRATED PART OF DECISION-MAKING

Together with the clear focus on long-term approach and sustainable value creation found in JM’s business concept and strategy, risk management helps ensure that risk-taking in the business is kept at a balanced level. Risk management is therefore an integrated part of decision-making at all levels of JM. It is subject to strategic initiatives from the Board and management, and a current risk analysis is regularly presented in the Audit Committee.

Procedures for project oversight, monitoring and follow-up are designed to reduce business and implementation risks. This applies in particular to the initiatives produced within the framework of Structured Project Development, which help reduce the operational risks in the business. All significant business and project decisions are analyzed with regard to both risk and opportunities.

In 2018, the most important risks in JM, in addition to the macroeconomic development, were related to the cautious housing market primarily in Stockholm during the year, with gradual stabilization. Lower sales and reservations level in current production have still resulted in a balanced risk for the operations. Housing starts during the year were slightly limited by both demand and the time required for the planning processes.

The situation for 2019 is similar, and business will primarily be dependent on the development of local excess supply of newly produced residential units in Stockholm. This in turn will govern the conditions for sales and housing starts for new projects. The planning processes in our primary markets also constitute a limiting criterion.

Read more about risk management in the Annual Report