Near-term risks

In its operations, Enersense is exposed to strategic, operational and financial risks and external threats. Enersense seeks to protect  against these risks by means of a continuous and systematic risk assessment process, for example, and by fully considering risk factors when deciding on business projects or investments that are significant for the Group. Compared with what was reported in the Board  of Directors’ report for 2022, no material changes have taken place in significant short-term risks and uncertainties.

The Russian attack on Ukraine, which began in February 2022, continues and maintains geopolitical tensions and uncertainty about  the development of the global economy. Inflation in the markets relevant to Enersense continues to be markedly higher than usual,  which is reflected especially in the Baltic countries, where high wage inflation is causing costs to increase. The prices of materials are  also higher than usual, and there is a risk that old contracts in particular cannot be renegotiated. Geopolitical uncertainty may also be  reflected in labour availability, especially in the Baltic countries and elsewhere in Eastern Europe. The risk of power outages arising  from the energy availability issues caused by the war still exists during the coming winter. This may have a negative impact on the  business operations of Enersense’s customers and thereby also on Enersense’s operations next winter.

Increased uncertainty about economic development and the increase in operating and financial costs caused by high inflation have  had a negative impact on investment environment. This may lead to a deterioration in the financial position of Enersense and its  customers, through factors such as the availability of financing, and further to a decrease in demand for Enersense’s services and  slower-than-expected sales development. Changes in the investment environment may have a negative impact on value measurement  of certain items in the balance sheet.

The tight competitive situation in many of Enersense’s business areas and the offerings of any new competitors may cause pressure in  terms of project sales prices and profitability.

(Half-year Financial Report 2023, 3 August 2023)