Federal and regional risks

These risks are mainly determined by global macro-economical factors occurring on global level, in Russia and regions. These factors may have a negative impact on possible fund raising, liquidity ratios, investment and operating efficiency and, finally, on shareholder value of the Company. Besides, recession negatively influences the production volume and energy consumption causing Company’s revenues to decline. The key factor of the macro-economical risk is an ongoing global crisis influencing commodities and financial market indicators: oil and energy prices as well as primary resources prices, cost of capital, exchange rates, inflation. The Russian economy, along with BRICS economies, belongs to emerging markets and is vulnerable to global recession. This is determined by its dependence on energy resource prices, low volume and volatility of the Russian stock market, transiency of domestic bank system.

To minimize the consequences of the risk we undertake measures aimed at the optimization of debt share in overall capital structure, attraction of long-term borrowings and loans with fixed interest rates, increased efficiency of operating and investment expenses of the Company.