Impregilo group uses its complex and articulated risk management process as an important strategic tool in achieving its objectives in terms of creating utmost value for, and protecting shareholders.
The diversification of the group’s operating activities, both in core business sectors and in non-core sectors, means that its management faces a wide variety of different problems, which, in many cases, are difficult to foresee. Depending on the various operating situations and the different resulting risk types that can arise, management has created specific ongoing management and monitoring strategies to limit as far as possible fluctuations in cash flows due to the development of situations that arise.
To this end, the risk areas existing currently are described in the sections on each segment’s performance so as to allow comparison with the comments given in the 2012 Annual Report and an analysis of any new situations that have arisen at the date of preparation of this Report.
These descriptions are integrated by additional general considerations about risks common to the entire group’s operations. The key types of risks identified and monitored by Impregilo are:
- operational risk being the risk related to performance of contracts and relationships with individual customers.
- financial risk, split into the following components:
- market risk deriving from the group’s exposure to interest rate fluctuations, exchange rate fluctuations and, with respect to the Engineering & Plant Construction Segment, commodity price volatility;
- credit risk deriving from the group’s exposure to potential losses arising from the customers’ non-compliance with their obligations;
- liquidity risk deriving from the risk that the financial resources necessary to meet obligations may not be available at the agreed terms and deadlines.
The notes to the consolidated and separate financial statements give detailed information about management of these risks.