Strukton is a capital-intensive company that manages an extensive, specialised range of equipment, particularly in the field of rail infrastructure. This equipment is generally owned by Strukton. The costs are depreciated over the useful economic life of the equipment. If Strukton is unable to deploy this equipment to a sufficient extent at break-even rates, this may not lead directly to cash outflows but it does have a negative impact on Strukton’s results.
Furthermore, many of
Strukton’s employees have a permanent employment contract. If these people cannot be put to work on current projects at break-even rates, for example, because there is insufficient work, this will have a negative effect on the company’s profitability and cash flows.
Strukton Rail is dealing with this through international expansion in the European market and through the transnational deployment of equipment and employees.
In some cases, major investments are shared with partners. Moreover, the risk of underutilisation is limited throughout Strukton by continually seeking to increase the share of non-project related activities. The lifecycle approach used within all Strukton companies fits in with this.
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Risk management and internal control.