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Controlled risk taking essential for good profitability

In 2016, the most important risks in JM were related to macroeconomic developments, where good GDP growth, a stable housing market and a good level of sales in ongoing production have resulted in a balanced risk for the operations. Housing starts during the year continued to be restricted by the planning processes. The situation for 2017 is similar and business will be largely dependent on the economic development. 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.

JM generates value through project development – by optimizing customer value, revenues and costs by identifying and acquiring land on which to develop attractive neighborhoods and commercial premises. During the process, the project developer is faced with a number of risks and opportunities, which if handled appropriately can add to value generation and profitability.

RISK MANAGEMENT – AN INTEGRATED PART OF DECISION-MAKING

Together with the clear focus on long-term approach and sustainable value generation 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 thus an integrated part of decision-making at all levels within JM and is subject to strategic contributions from the management and Board.

Routines for project oversight, monitoring and follow-up are designed to reduce business and implementation risks. This particularly applies 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 2016, the most important risks in JM were related to macroeconomic developments, where good GDP growth, a stable housing market and a good level of sales in ongoing production have resulted in a balanced risk for the operations. Housing starts during the year continued to be restricted by the planning processes. The situation for 2017 is similar and business will be largely dependent on the economic development. 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 2016 Annual Report.