Austrian steelmaker Voestalpine Tuesday said is cutting more shifts at its sites as the coronavirus pandemic increasingly hits demand and called for swift restarts of the automotive and industrial sectors.
The company will increase the number of employees on reduced shifts in Austria to 20,000 in May from 18,000 now in response to shrinking demand. Also 6,000 of its 8,300 employees in Germany are already on reduced shifts while the company considers similar measures in Belgium and the Netherlands.
Voestalpine trimmed its outlook by Eur40 million ($44 million) for its 2019-20 fiscal year (April-March) and said it would make an operating loss of Eur135 million. The previous EBIT outlook was “just positive.”
“In view of the COVID-19 pandemic and its impact on our operating environment, naturally we have no other choice but to be much more critical than originally planned in our assessments of future market expectations. Therefore, we must further reduce our expectations for the 2020-21 business year and for the value of individual companies, and again implement non-recurring write-downs,” CEO Herbert Eibensteiner said.
The pandemic started to have an impact on Voestalpine’s operations in mid-March when it announced the temporary shutdown of a blast furnace at its main mill in Linz, cutting pig iron production capacity by 20%. The site has a pig-iron capacity of 5 million mt a year and produces hot- and cold-rolled coils as well as electrogalvanized, hot-dip galvanized and organic-coated steel strip.
In addition to measures taken last year due to a weak 2019, Voestalpine will now make non-recurring write-downs of Eur125 million in several business segments during 2019-20 at the foundries in Traisen and Linz, Seamless Tubes (Tubulars), Welding Consumables (welding sector), Buderus Edelstahl (Wetzlar, Germany), Cartersville and Texas.
“We are already preparing for the announced restart of the automotive industry and other sectors which are more important to our Group. Quickly getting back up to speed will be vital. The Austrian government has now taken the first step towards restarting economic activities and reviving consumption. Now further steps must soon follow in order to get industrial production back up and running as quickly as possible,” Eibensteiner said.
— Laura Varriale
