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Risk administration

GENERAL RISKS AND UNCERTAINTY FACTORS CONCERNING OPERATIONS

The most significant risks involved in Savosolar’s business are the ability to win new projects to achieve growth in line with the strategy, the sufficiency of the necessary working capital, and the ability to increase the efficiency of operations so as to turn the operations profitable.

The war in Ukraine has increased uncertainty concerning the availability and prices of materials and components. No Russian or Ukrainian components are directly used in Savosolar’s products. However, the war situation can maintain exceptionally high prices material and component prices and prolonged delivery times. If continued for a long time, these may slow down the growth of Savosolar’s business and the improvement of profitability. On the other hand, the rise in energy prices and the reduction of the use of Russian fossil fuels are estimated to have a positive effect on the demand for renewable energy, which also facilitates the development of Savosolar’s business.

The company’s Board of Directors monitors the development of the company’s profitability and cash flow actively and, together with the company’s management, seeks the best solutions to develop the company towards profitable long-term business. The Board of Directors continuously considers the sufficiency of financing as an important part of the company’s growth strategy. Considering the recent favourable development for the company and the industry, the Board is confident that the company will be able to raise the necessary financing in the form on equity and debt capital to achieve the growth and profitability in line with its strategy.

However, it cannot be guaranteed that the volume and profitability of the company’s business will grow sufficiently and that the company can gain enough supplementary finance just on time and with terms and conditions that are favourable enough for the present shareholders. In case the company does not succeed in generating growth and improving its profitability and/or raising additional financing to meet the needs of business, the company may be forced to postpone, cut back or terminate operations. (Updated 18 August 2022)