Short-term risks and uncertainties
The description of short term risks of our business operations are published in accordance with Metso's Interim Reviews.
Short-term business risks and market uncertainties
Uncertainties surrounding economic growth globally might affect our customer industries and weaken the demand for Metso’s products and services. A significant slowdown in global growth might further reduce market size and lead to tougher price competition. Our backlog, projects under negotiation and other business operations might also be adversely affected by political turbulence seen in many regions.
Exchange rate fluctuations might adversely affect our order intake, sales and financial performance although the wide geographical scope of our operations limits the exposure to single currencies. Metso hedges currency exposure linked to firm delivery and purchase agreements. Sufficient funding and financing is crucial at all times in order to ensure the continuity of our own operations. Our current cash assets and funding are considered sufficient to secure liquidity and flexibility in the short and long run.
A prolonged uncertainty in the Chinese economy might affect our business negatively through declining foreign investments made in the country and falling commodity prices. Low commodity prices reduce the investment appetite and cut spending among our customers. This may cause projects to be postponed, delayed or discontinued. A tougher pricing environment also makes it harder to integrate increasing labor and manufacturing costs into our prices.
Under the present market conditions, there is an increased risk of lawsuits, claims and disputes to be taken against Metso in various countries related, among other things, to Metso’s products, projects and other operations.