Risk management - an integrated part of decision-making
JM’s operations are exposed to a number of risks that due to their nature impact the Group to varying extents. The risks can be directly attributable to decision-making within the Group but also an effect of events outside of JM’s control. Together with the clear focus on longevity and sustainable value creation found in JM’s business concept and strategy, risk management helps to ensure that risk-taking in the business is balanced. Risk management is thus an integrated part of the decision-making at all levels within JM.
Good risk management is maintained through competent employees, internal governance documents, and documented processes. Through continuous follow-up and a proactive and structured working method, JM’s goal is to ensure to the greatest extent possible that the risks are mitigated or remain latent. JM’s risk management is subject to strategic initiatives from the Board and management, and a current risk analysis is regularly presented to the Audit Committee.
High uncertainty with a cautious housing market due to high inflation and interest rate levels, high costs in the projects, and the effects from the ongoing war in Ukraine are risks that have been evident in 2024.
Decreasing interest rates from high levels
During 2024, inflation decreased on all of the Group’s submarkets. As a result, Sveriges Riksbank and the European central bank implemented a number of interest rate cuts. However, Norges Bank let its policy rate remain unchanged since inflation in the country had not fallen to the desired extent. Despite cuts, the policy rates were still at higher levels than before, and this affected JM both directly and indirectly. A high policy rate leads to high financing costs in housing production, and JM was impacted indirectly by customers’ limited payment ability. The high interest rate expenses resulted in customers being more cautious since household finances have been under pressure, which had a negative impact on JM’s sales.