Financial and exchange rate risks
As a result of increasing regulation in the financial market, the operations of credit and bond markets may become more difficult, which may impact the company’s ability to acquire long-term debt financing at a competitive price. The financial risks are managed in accordance with the treasury policy approved by Metsä Board’s Board of Directors. The purpose is to hedge against considerable financial risks, balance cash flow and give the business enough time to adjust to changing conditions.
Metsä Board sells its products in several countries and is therefore susceptible to fluctuations in exchange rates. Impacts of fluctuations on Metsä Board's profitability can be found in here. The sensitivities do not include the impact of hedging.
The management of credit risks related to commercial operations is the responsibility of Metsä Board’s executive management and Metsä Group’s centralised credit control. Metsä Board’s management determines the limits on credit extended to customers and the applicable terms of payment in cooperation with the centralised credit control. Nearly all credit risks are transferred by means of credit insurance contracts. The main principles of credit control are defined in the credit guidelines of the risk management policy approved by the company’s Board of Directors.
Management of financial risks
Metsä Board’s financial risks and their management are described in
more detail in the 2022 Annual Report - Notes to the Consolidated Financial Statements – 5.6. Management of financial risks, pages 122–123.