Gearbulk Integrated Report 2023 - Report - Page 51
INTEGRATED REPORT 2023
OUR INPUTS
Financial Capital
Manufactured Capital
Human Capital
Social and Relationship Capital
Intellectual Capital
Natural Capital
8 DOING BUSINESS WITH THIRD
PARTIES
9 MARKET RISK AFFECTING
LIQUIDITY AND COVENANCE
10 LOSS AND INTEGRITY OF
DATA
Several sanctions have been put in place
by several countries that includes the EU.
Doing business with sanctioned listed
countries could lead to reputational
damage and increased risk of interruption of Gearbulk commercial relationships impacting value of Gearbulk.
The organization’s pro昀椀tability is signi昀椀cantly in昀氀uenced by market volatility and
outlook, which also impacts its available
cash due to existing debt and obligations. Moreover, the organisation faces
the potential risk of breaching covenant
requirements with 昀椀nancing institutions,
which are directly a昀昀ected by earnings,
operational losses, and liquidity, especially given the current market conditions,
thus increasing the likelihood of breach.
Cyberattacks are becoming more
frequent and the risk of data loss is
increased leading to both 昀椀nancial and
non-昀椀nancial losses. The company can
be exposed to ransomware scenarios
or system unavailability.
Operational losses due to penalties and
reputational damage would impact Gearbulk value. Further, liquidity risks would
increase should earnings and access to
昀椀nance be a昀昀ected.
In a volatile market, the organisation’s ability
to repay debt becomes more precarious,
elevating the risk of default on loan repayments and other operational expenses.
Additionally, should a covenant breach
occur, there is a heightened risk of immediate debt repayment and reputational
damage, potentially limiting access to future
昀椀nancing opportunities.
The possibility of data loss and
compromise of con昀椀dential information, resulting in 昀椀nancial losses
and reputational damage.
Gearbulk currently performs screening
on third parties and has recently drafted
policies and procedures that will support
due diligence procedures on third
parties.
The organisation aims to maintain
optimal and sustainable cash break-even
points while also concluding on alternative sources of funding to ensure longterm sustainability. Currently, e昀昀orts are
underway to explore alternative funding
options and additional investments to
meet the organization’s requirements
and support its sustainability goals.
Robust business continuity plan is
to be implemented together with
mitigation of financial impact by
insurance providers.
Screening and working together with our
third parties reduces reputational risks
which also can lead to opportunities of
identifying and strategically partnering
with existing and prospective third
parties in various areas of the business.
Proactive risk mitigation strategies
described above provides opportunities for alternative sources of 昀椀nancing
together with agreeing on potential
favorable terms in the current market
conditions.
Securing our data not only creates
trust with our stakeholders but
supports compliance with regulatory
requirements providing a competitive edge in the digital landscape
continuously evolving.
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