Stalprofil’s steel sales grew 21% on-year in the first quarter to 48,000 tonnes despite reduced steel output and consumption in Poland the EU, the Polish distributor says. Consolidated revenue rose 8% on-year in the first quarter to PLN 365.8 million ($91.14m), but net profit dropped -10% to PLN 7.1m.
The firm says that although the Covid-19 pandemic has not yet had a significant impact on its operations, a protracted economic crisis could hamper performance. The firm cites risks such as problems with inflow of cash and payment delays, weakening demand, lower sales prices, interruptions in the supply chain, and worker absenteeism in the case of a second wave of the virus.
The infrastructure segment, which supplies pipe mainly to gas pipelines, has a full order-book until end-2020 and the firm does not anticipate any difficulties in sales or a weakening of demand. The firm has seen some disruption to procurement of insulated pipe, which it dealt with by placing orders with alternative suppliers. With Poland and other European countries easing Covid-19 lockdowns, the risk of disruption to business is fading, the distributor says.
Stalprofil’s indirect Kolb steel structures fabricator subsidiary also has a full order-book for the year. The expansion of its production facility, completed in February, has allowed it to secure new orders in the export market that are more profitable than orders in the domestic market.
There is more uncertainty surrounding the trading business, Stalprofil observes. After a period of moderate sales and stabilisation of long product prices in Q1, demand has weakened and prices have fallen.
“Investment into the construction of the gas transmission network, and road and rail infrastructure financed by EU funds is anticipated to continue in 2020 in the domestic market,” Stalprofil says in a report seen by Kallanish. “The implementation of these plans should mitigate the negative impact of the market environment on demand and prices in the Polish steel market.”
In 2019 Stalprofil’s steel product deliveries fell -1% on-year in 2019 to 215,839t, while steel structures sales fell -15% to 2,374t.