Ljubljana, September 30, 2020 – Publication of SIJ Group’s unaudited performance results for the first half of the year 2020, and further adjustments SIJ Group’s operations in response to the coronavirus epidemic.
According to the information released by the European Steel Association, cast steel production in the European Union has decreased by 18.7 percent over the first six months of this year. The steel market is strongly affected by the coronavirus epidemic and increased steel imports from countries outside Europe. For a relatively long period of time, SIJ Group has been successfully tackling the exceptionally negative trends in the steel industry, which confirms that our strategic focus on niche steel markets was the right choice. As we generate the largest share of our revenue on the European market, we are already experiencing the effects of the changes in steel consumption and demand within the European Union, as well as a decline in the total volume of incoming orders. The extraordinary conditions in our international operations are reflected in SIJ Group’s performance results for the first half of the year 2020.
The company’s unaudited financial data shows that SIJ Group generated EUR 359.7 million in sales revenues (a 11.9 percent decline compared to H1 2019), with 84.8 percent of that amount generated on foreign markets. The achieved EBITDA stands at 24.9 million EUR, which is down 33.8 percent compared to first half of 2019. Meanwhile, the EBITDA margin of 6.9 percent is 2.3 percent lower compared to the first half of 2019. Due to the negative impact of the coronavirus on the operational result, SIJ Group impaired assets. This was the main contribution to the negative operating result in the amount 8.4 million.
In the first half of the year, SIJ Group introduced a number of activities aimed at mitigating the operational effects of the coronavirus epidemic – we optimised costs across all levels of our operations and adjusted our business plans until the end of 2020.
In addition, we carefully reviewed our investments planned for 2020 and stopped those which can be postponed to later periods without any major adverse impacts on our operations. Investments with binding contractual obligations and immediate positive effect will be carried out according to plan. This resulted in the investment budgets for 2020 shrinking by one third.
Along with our adjusted operational plans until the year 2020, we reorganized our operations, and implemented shorter working hours where necessary. This was done after discussions and in agreement with the trade unions, with whom we will also continue working if further measures impacting our human resources are required. None production in Slovenian companies was stopped completely.
Careful and selective approach to our clients resulted in absence of the material delays in customers' payments and there were almost no order cancellations. Together with prudent liquidity management policy this allowed us to honour our commitments to our investors and creditors. Thus, SIJ Group used its own funds to repay its obligations arising from the matured SIJ5 bonds, amounting to EUR 51.2 million. SIJ Group holds a solid liquidity position, which it maintains through numerous auxiliary activities during the period of the coronavirus epidemic.
Based on the positive market outlook, SIJ Group expects the steel industry to begin recovering as early as 2021. Already in 2020, we are creating the conditions which will allow us to successfully enter the recovery cycle. SIJ Group, specifically its subsidiary SIJ Metal Ravne, obtained the EN 9100 international quality standard, allowing it to penetrate the demanding market of high-quality technologically advanced products for use in the aircraft industry, space flight and other advanced industries. The company SIJ Ravne Steel Center, which is part of the SIJ Group’s Steel Processing and Distribution Division, performed a strategic reorganization to form the company RSC Holding, through which SIJ Group has established a leading regional center to support the tooling industry. This marks an important strategic step forward in pursuance of the Group’s development strategy for the tool steels segment.
SIJ Group is Slovenia’s largest vertically integrated metallurgy group which incorporates circular economy principles in its operations, allowing its products to maintain leading market positions in European and global niche steel markets. SIJ Group is among Slovenia’s top exporters and is considered a key employer in the Gorenjska and Koroška regions.
For more information, please contact:
SIJ – Slovenska industrija jekla, d.d.
mag. Sara Wagner, Head of Corporate Communications
Phone: +386 1 242 98 27
Mobile: +386 41 313 532