Pandemic COVID-19 had a negative impact on operating results (EBITDA and EBIT), the largest Austrian steel company Voestalpine in the past financial year 2019/20 ended March 31.
the management Board of the company announced on Tuesday about the need for a one-time write-offs due to impairment of assets. As explained in the press service of Voestalpine, these actions will affect EBIT, but not on EBITDA. The assets are revalued as a result of changing underlying conditions in the 2020/21 financial year.
Effect COVID-19 also led to a higher discount rate (WACC - weighted average cost of capital), so that further write-offs in the amount of 125 million euros. In addition, the first operational implications of the pandemic COVID-19 began to impact in mid-March and probably will continue.
As announced at the end of March, with 22 300 employees in Austria about 18,000 have already been translated on incomplete working day. At Voestalpine said that this figure will increase to 20,000 by may. In addition, part-time translated into almost 6 000 8 300 employees in Germany. The deployment of such models is currently being considered and implemented by the company in Belgium and the Netherlands.
"Given the pandemic COVID-19 and its impact on our operating environment, of course, we have no other choice but to be much more critical than originally planned, in our estimates of future market expectations. Therefore, we should lower our expectations about the 2020/21 financial year and the value of individual companies and re-introduce a one-time write-off," said Herbert Eibensteiner, Chairman of the Board of Voestalpine AG.the management Board of Voestalpine expects a somewhat lower (compared with forecast at the end of 2019) the operating result (EBITDA) in the amount of more than 1.1 billion euros for the completed 2019/20 financial year. As for EBIT, the previous forecast no longer applies: the profit from operating activities (EBIT) will be negative and will amount to about 135 million euros of losses.
