Page 46 - flipbook-ubp-IR

INTRODUCTION ABOUT US
RISK REPORT
Out of the above key risk categories, a list of the risks requiring further attention and progress on their mitigating actions have been set out in the table below.
Risk identification and assessment
44
UBP INTEGRATED REPORT 2022
MANAGEMENT APPROACH
Risk identification
Risk assessment
Business Environment and Market Risks:
Macroeconomic and market:
The risk that the economic environment in a given country can significantly change and have an influence on demand for construction and building materials.
Fundamentally, the expansion (or contraction) of the economy determines the demand for construction materials. Sales volumes, prices and/or industry structure may all be impacted by these changes in underlying demand.
Economic uncertainties have intensified as a result of the COVID-19 pandemic, leading to further erratic currency fluctuations. Changes in currency rates may have an impact on the Group’s business operations and financial situation.
More details can be found in the financial risk management section of this Report.
Political:
The risk or potential for financial, market or personnel losses that occur due to political decisions or disruptions. Political risk is also known as ‘geopolitical risk.’
The Group has operations across borders and is exposed, either directly or indirectly, to the consequences of economic, political and social instability, including currency volatility, turmoil, terrorism, civil war and unrest.
Political instability (economic and social) can have an effect on our people, business environment and reputation. Examples include changes in the Government or greater political pressure, civil unrest and internal or external conflicts and tensions. This effect could be direct (such as security repercussions) or indirect (such as economic uncertainty). It could also make us more vulnerable to a wide range of dangers such as compliance and raw material availability.
The situation between Russia and Ukraine grew worse in February 2022. A rapid change in the situation is already starting to cause significant market volatility on a global scale, including escalating prices and disruptions in transport logistics.
Pandemics and epidemics:
A pandemic is an epidemic occurring on a scale that crosses international boundaries, usually affecting people on a world- wide scale.
The health of our workforce and the areas where we operate can be impacted by pandemics, epidemics, outbreaks of infectious illnesses or any other significant public health concerns (such as COVID-19, Ebola, Avian flu, H1N1 or SARS), whether they are local or global in scope. Additionally, it can cause our supply chains to be disrupted, travel delays, workplace closures and other operational constraints that could have a materially negative economic impact.
COVID-19 remains a significant political and economic danger on a global scale in 2022. In the medium term, tight public finances and the end of governmental stimulus programmes may impede economic recovery and possibly lead to lower sales.