Gestamp, the Spanish-headquartered supplier of components to the global automotive sector, has cancelled its original 2020 guidance given the current uncertain situation due to the Covid-19 outbreak. The company is “… drastically” reducing its planned investments in 2020 while preserving projects that have been committed with customers, says Gestamp during its latest market presentation on 21 April monitored by Kallanish.
“As a result of the current situation, the group’s plants, with exception in China, saw gradual shutdowns during the second half of March beginning from Europe, and extending to North and South America. Some of our operations are restarting and we expect a gradual re-opening of most of our facilities during the coming weeks,” Gestamp says.
In China, Gestamp`s 11 production plants and two R&D centres are operating and returning to normal. “The implementation of operational efficiencies and labour flexibility measures have allowed the company to have a satisfactory first-quarter performance. We expect to improve our results throughout the rest of the year. Activity levels in some of our plants in April are already in line with foreseen targets,” Gestamp adds.
The company has implemented a contingency plan to adapt to the current market environment by managing liquidity and cost efficiencies in order to protect its cash generation over the coming months.
“During the first quarter, Gestamp`s liquidity position amounted to €2.0 billion ($2.17 billion). Actions currently being taken include extension of credit lines, an increase in existing financing facilities and new long-term loans,” the company continues.
Gestamp is in ongoing discussions with financial institutions in the different countries in which operates to secure additional funding through support programs related to Covid-19.
The group will publish its Q1 results at market close on 18 May.