Bowim anticipates second-quarter pandemic impact

Polish distributor Bowim says the Covid-19 pandemic impact could hamper its earnings in the second quarter, while its costs could be affected by its use of state programmes designed to support firms through the crisis.

Bowim’s consolidated shipments fell -1% on-year in the first quarter to 131,367 tonnes due mainly to sheet sales declining -4% to 48,490t. Pipe and profile sales rose 4% to 26,296t and rebar sales were up 10% to 23,687t.

Consolidated revenue fell -10% in Q1 to PLN 314.8 million ($78.7m), although the firm turned to a net profit of PLN 2.3m versus a loss a year earlier of PLN 2.7m.

The lower sales were due to reduced steel prices and the impact on demand towards the end of Q1 of the Covid-19 pandemic. Thanks to securing new markets and expanding product range, the sales volume decline was limited, the firm says.

Prices were depressed by weaker demand from the EU automotive industry, which increased competition among the EU’s sheet suppliers to find new buyers.

“From March 2020, the Polish economy began to lose momentum due to the start of the ‘lockdown’,” Bowim says in a report seen by Kallanish. “A slump in trade and the clothing industry was observed already at the end of the month. March was the first month in which everyone began to be affected by restrictions.”

“Distributors and customers were unsure of the future and so they stocked up inventory in the fear of the Covid-19 pandemic worsening, difficulties in transport and delivery deadlines,” the firm says. “Steel products trading changed – companies introduced new safety measures, such as shift rotation systems and limitations to contact between people. Increased order traffic, as well as high load capacity at processors had a positive impact on the results of many companies.”