Acerinox improves its results a 13% during the second quarter of 2019

Acerinox ends the first half of the year with a profit after taxes and minority interests of €69 million.

  • Profits after taxes and minority interests of the second quarter totalled €37 million, a 13% higher than the previous quarter.
  • Acerinox obtained these results in a context of trade tensions, generalized protectionist measures and the slowdown of global demand.
  • The Excellence 360º Plan will allow rise €24 million the Ebitda
  • Increase and paid of the dividend
  • Conversations for the reduction of Acerinox Europa’s workforce
  •  Outlook

Acerinox obtained €37 million in profits in the second quarter of 2019, a 13% more than those obtained during the first three months of the year and a 54% less than those of the same period of last year. Profits in the first half raised up to €69 million euros, a 50% lower than those of last year.

The company’s EBITDA in this second quarter totalled €97 million, a 7% more than the previous quarter and a 36% less than the one of the same period of 2018. The amount of EBITDA of the first half of the year totalled €186 million, a 12% lower than that of the previous half and a 30% lower than that of the same period of last year.

During the second quarter, the Group’s melt shops produced 570,119 tons, a 9% less than those manufactured in the first quarter. The weight of production in the first half raised up to 1,189,039 tons, being an 8% lower than the first half of 2018 and a 6% lower than the previous half.

Acerinox obtained these results in a context of trade tensions, generalized protectionist measures and the slowdown of global economy.

 

The Excellence 360º Plan will allow rise €24 million the Ebitda

Acerinox launched the implementation of the Planning 360º project within the framework of the Excellence 360º Plan.  The project is a planning model that covers the whole value chain. It aims to enhance customer service, increasing the accuracy of deliveries while optimizing the mix of raw material purchases and increasing the reliability of the production processes.

The Excellence 360º Plan seeks to promote and optimise the Acerinox Group’s business upon the basis of four pillars to increase the efficiency of its processes: production, supply chain, commercial management, and purchases of raw materials.

 

Increase and paid of the dividend

The expectations with regard to development were met in the first six months of the Plan, supported particularly by better performance, a reduction in the level of customer complaints, greater efficiency in the use of consumables and time optimization in the production processes.

The General Shareholders’ Meeting of Acerinox S.A. held on 11 April in Madrid approved the proposed resolutions listed in the agenda, including an increase in the return to shareholder of €0.50 per share, as opposed to the €0.45 they had been receiving in the past few years.

The approved dividend represents an increase of 11% compared to the previous financial year, and will be distributed in a first payment charged to unrestricted reserves in the amount of €0.30 per share (paid on 5 June 2019) and a second payment charged to the Share Issuance Premium account in the amount of €0.20 per share (payable on 5 July 2019).

Moreover, the Shareholders’ Meeting agreed to a capital reduction via redemption of treasury shares acquired by implementing the buyback programme, of up to 2%. 5,521,350 Acerinox, S.A. shares, equivalent to 2% of the share capital, were redeemed on the Madrid and Barcelona Stock Markets on 13 June. The number of outstanding shares now totals 270,546,193.

 

Conversations for the reduction of Acerinox Europa’s workforce

In parallel to the negotiation of the third Collective Agreement of Acerinox Europa, S.A (factory of Campo de Gibraltar) the legal and trade union representatives of workers have been informed of the opening of a negotiation period which could entail the reduction of the workforce in up to 300 workers. The conversations with representatives are currently on-going.

 

Outlook

Market conditions in different regions are very competitive: in Europe, impor t pressure and macroeconomic uncertainties continue and visibility is reduced; on the other hand, in the Asian market the excess of supply persists and we estimate prices to remain low. On the positive side, we expect the strength of the American market, the main market of the Acerinox Group, to be maintained.

Raw material prices remain very volatile, which is a comp lication added to manage the business.

Despite these difficult market conditions and the seasonal slowdown in Europe, we expect EBIT DA in the third quarter to be similar to that in the second quarter.