Engineering, currency and competitiveness
Working global and jumping barriers necessarily involves facing challenges because:
- You have to adapt to highly complicated market regulations, which are also prone to dramatic changes.
- Versatility is crucial in order to ensure that these changes do not affect a project’s profitability.
- Carrying out large-scale projects often means forming consortiums with partners from all over the world, which can be a challenge in itself.
Currency management for engineering
The distinctive features and needs of the sector and its operations require a currency policy that is tailored accordingly. This can take the form of:
Currency management on a project-by- project basis
A bespoke currency strategy aligned with the needs of every project, allowing for more effective budgetary control. The ability to analyse the most profitable aspects of a project, coupled with flexibility in rethinking those areas where profitability is lower, makes for a significant competitive advantage.
Analysis of overall multi-currency exposure
When you are being paid in dollars and have to make payments in the local currency and euros, this scenario gives rise to specific cash-flow management needs. A suitable approach involves setting out a plan to hedge against the risk of exchange-rate volatility and to ensure you trade on the currency market in the most favourable conditions possible, thereby optimising profit margins.
By optimising your currency strategy in line with the characteristics of a project, you can leverage cash flows to boost profitability. In projects in which free cash flow can be generated, the goal will be to channel this surplus to whichever area provides scope for boosting profitability. On the other hand, if an increase in debt is required, the currency strategy will be adapted with the aim of minimising the cost of this debt.
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