Italy's Arvedi Group closed 2020 with a positive net result, albeit down compared to the previous year due to the effects of the pandemic and, in part, to the technological adaptation of its electric furnace in Cremona. "As of December 31, the net profit was over €3 million, compared to €56.5 million in 2019.
However, profitability remained at satisfactory levels, well above those of the major competitors, despite the negative impact on demand due to the closure of many activities following the health emergency, which caused a drop in sales prices. The consolidated market position and technological leadership supported by an important investment plan, which has not been postponed or delayed, have allowed Arvedi Group, in an objectively difficult year, to increase its employees to more than 3,800 in Italy. In the last decade, the positive trend of volumes produced and sold was almost always in contrast with the market of European flat products. The decrease in volumes in 2020 was lower than the average recorded in the European market," the company said in its statement.
The group underlined that it invested approximately €1.4 billion in Acciaieria Arvedi, its main subsidiary, between 2007 and 2020. In 2020, Acciaieria Arvedi's revenues amounted to €1,710 million, compared to €2,049 million in 2019. "The drastic reduction in the consumption of steel products, linked to an already lackluster market context at the beginning of the year and impacted by the spread of the pandemic, negatively affected both quantities and sales prices," Arvedi explained.
EBITDA, as a percentage of revenues, was 8.2 percent compared to 9.9 percent in 2019. Net financial debt as of December 31, 2020, was €460 million (against €342 million in 2019). The group commented, "Acciaieria Arvedi did not resort to ordinary layoffs due to Covid-19, nor to other emergency support tools provided by legislators."
In 2020, the group made investments of around €200 million without slowing down, despite the health emergency. In December last year, a loan of €195 million was finalized with a pool of 11 banks. A "green loan" of €165 million, with the intervention of SACE [Italian state-owned export credit agency] as guarantor under the Green New Deal, is intended to support investments in the industrial sites of Cremona and Trieste.
With regard to the current year, Arvedi Group stated that the prospects are decidedly positive. In particular, the sharp increase in sales prices in the first months of the year translated into a positive gross operating margin. "As regards the continuation of the year, the signals coming from the market confirm the forecast of a trend characterized by demand supported by a further increase in prices also for the months to come," Arvedi said.