Despite COVID, VÍTKOVICE STEEL improved its economic results

7.7.2021

Despite COVID, VÍTKOVICE STEEL improved its economic results

VÍTKOVICE STEEL residing in Ostrava achieved the best economic result for the last 3 years despite the difficulties caused by the coronavirus pandemic. The financial result is negative but operational EBITDA is zero which confirms the positive trend of operational performance.

“We are through a hard year; the pandemic brought both personal and business challenges. The demand for plates declined by more than 20 % and we faced enormous pressure of cheap imports from non-European countries. in spite of the complications we produced more than half a million tons of products in 2020 and improved the year-by-year economic results,” said Dmitrij Ščuka, General Manager and Chairman of the Board of Directors of VÍTKOVICE STEEL.

At the beginning of 2020, the steel market developed favourably; the demand, particularly for steel, was strong in spite of the emerging pandemic. But then the disease spread resulted in production shutdowns and fall of demand. Thanks to the high number of orders received in the first months of the year the company succeeded in maintaining the production and economic results at a good level in the first half of the year. But the sharp slowdown of demand in the third quarter made it very difficult to maintain the production. The imports from non-EU countries squeezed the plate selling prices almost to the level of variable costs which cannot be successfully fought against and the company recorded considerable losses. VÍTKOVICE STEEL recorded a loss of 267 M CZK for 2020 which is, however, substantially lower than in the previous years (480 M CZK for 2019) and confirms the company’s return to positive operational performance and profitability.

„Our sales of own goods and services for the last year decreased by more than 20 per cent to 6.5 billion CZK (from 8.4 billion CZK in 2019), but it can be looked upon as a good result in the light of the actual circumstances. 70 % of the sold products were directed to foreign countries and the key markets for the company were the EU countries,” added Radek Strouhal, Chief Financial Officer and member of the Board of Directors of VÍTKOVICE STEEL. The company produces steel plates, sheet piles and cut shapes. Most of its products are applied in building industry and mechanical engineering.

In spite of the factors mentioned above the company pursued the long-term development in the form of investments during the year. Cranes were renovated and equipped with remote controllers and plate marking with bar codes and automatic transport ordering were successfully introduced. The investments in improvement of labour safety and working environment continued. This applies, for example, to rebuilding of working cabins and resting rooms. The removal of buildings of the former steel making plant continued, too.

This year is regarded by the company management also as an extraordinary one. “The revival of demand exceeded the producers’ expectations creating an environment of skyrocketing prices. Nevertheless, the prices of input material – steel slabs – also went up; the last summer prices were tripled. But I believe that we will manage the turbulent situation and strengthen our market positions. The extension of EU safeguards on sheet pile imports is positive for us. I acknowledge the approach of our Ministry of Industry supporting Czech steelmakers at difficult circumstances. We would also appreciate resolution of the age-old dispute regarding the non-allocated emission credits,” stated Dmitrij Ščuka.

VÍTKOVICE STEEL, a. s. is a traditional European manufacturer of rolled steel products, the largest manufacturer of steel plates in the Czech Republic and the only manufacturer of sheet piles in the country. The company is owned by multinational investment funds from the countries of the former Soviet Union. It employs almost 900 people.

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