Risk Management
The world faced serious challenges and disruptions in 2022, as global economic activity encountered a broad-based and sharper-than-expected slowdown, with high inflation levels, rising interest rates and widespread concern over the possibility of recession, and tightening financial conditions in most regions adding to market uncertainty, compounded by the Russia-Ukraine crisis.
Against this volatile financial landscape, our core business was also impacted by the resurgence of Covid-19, adverse weather events and supply chain logistics challenges.
In line with our prudent approach to risk management, our Global Markets Platform maintained a healthy diversification of risks and hedges of the Group’s assets, contributing to LDC’s strong results in a very challenging year.
The safety of our people remained our first concern in the context of the Russia-Ukraine crisis, which significantly impacted grains and oilseed prices and operations, particularly for wheat. Here, we maintained a cautious but agile approach, swiftly developing organizational responses to mitigate operational risks, manage a volatile, high price environment and meet customer demand.
After the grain corridor opened and Ukraine’s deep-sea ports reopened in the second half of the year, our Freight, Grains & Oilseeds, Compliance and other teams worked closely together to support maritime export operations in the country and keep essential supply chains moving.
As the resurgence of Covid-19 continued to impact our operations, we relied on risk management systems adopted from the beginning of the pandemic, with dedicated committees continuing to oversee and govern key risks on critical business and operational decisions.
While value-at-risk (VaR) is only one of the risk metrics within LDC’s wider risk management system, the Group closely monitors its daily VaR, and its stability compared to 2021 is a measure of the success of risk management measures in 2022.
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Finance
In the uncertain context of 2022, we continued to secure liquidity and strengthen our balance sheet, while taking a more centralized approach to long-term financing.
Global Markets
Successful management of market risk and uncertainties, and investment in trading systems and new business lines.
Europe, Middle East & Africa
Resilience in the face of unprecedented challenges to deliver for customers and establish, maintain or consolidate leadership positions in the Region.