The emergence of steel demand as customers recover from the COVID-19 pandemic and an order backlog could see Acerinox’s Q4 2020 EBITDA being level with Q3 despite market uncertainty.
The European steelmaker’s melting shop production declined by 9pc to 1.6mn mt in the first nine-months of 2020 compared to the same period a year ago. The group’s factories produced 21pc more steel in Q3 at 538,467mt compared with the prior quarter due to improvements in steel demand after the pandemic related slowdown.
For the nine-month period, the hot rolling shop output fell by 13pc to 1.3mn mt from the same year-ago period, while cold rolling mill output fell 19pc to 1mn mt, and long product declined by 10pc to 157,000mt during the same period under comparison.
Acerinox’s sales turnover dropped by 6pc to €3.5bn ($4.1bn) in January-September 2020 from the same period a year ago. Net sales during each of the three quarters of 2020 were rangebound at €1.1-1.2mn. The company’s EBITDA declined by 8pc to €267mn for the first nine-months of 2020 from the prior-year period, while the group encountered a profit of €28mn in January-September 2020.
The strong financials were attributed to the management’s focus on cash generation, improved liquidity, reduction in costs, and improved working capital across all operating units.
Acerinox has a steelmaking capacity of approximately 2.5mn mt with six factories on four different continents including the two integrated sites, namely, North American Stainless in the US and Columbus Stainless in South Africa.