A higher demand for construction steel in Peru and Latin America is expected to drive Aceros Arequipa’s sales growth in 2020.

 

The steelmaker expects its sales to increase by 2-4pc this year, while maintaining an EBITDA margin of PEN 420-460mn ($123.8-135.6mn) due to these opportunities and improvements in operations, the company indicated while announcing its 2019 earnings. It also expects an increase in capital expenditure to PEN 600-700mn due to expansion and renovation of its mills.

 

The company’s sales grew 12.2pc to PEN 3,129.1mn ($922.0mn) in 2019 while its EBITDA increased by 8.6pc to PEN 393.7mn during the same period compared to the previous year. However, its net income decreased by 6pc to PEN 199mn compared to the previous year. 

 

In 2019, Aceros Arequipa’s exports increased by 2.4pc compared to FY2018 while domestic sales in Peru decreased by 2.8pc to PEN 2,660mn. Around 15pc or PEN 469mn of the company’s total sales were destined to export market. 

 

The company’s rebar and wire rod sales made up around 66.9pc of its total sales at PEN 2,093mn, with profiles and other long selections making up around 9.4pc or PEN 294mn, and 23.7pc or PEN 741mn, respectively, of total sales.

 

In November 2019, the company established the wholly-owned subsidiary Aceros Arquipa to strengthen commercial relations in Chile. 

 

The Peruvian steelmaker’s capital expenditure increased by 100pc in 2019. During the last quarter of 2019, Aceros Arequipa began investing in a future steel mill causing capital expenditure to rise by 57.8pc in Q4 2019. The investment received approval for additional expenditures from the company’s board in January 2020, increasing the total investment in the mill from $180mn to $208mn.

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