assembled tubes (TR) has opted for short-term management as energy and raw materials costs remain at all-time highs, and swing sharply, reducing profit margins on orders. The Amurrio Group (Álava) decided that the business portfolio does not exceed the current level of 230 million for this reason. The size TR feels “comfortable”, as stated Francisco ErazustaChairman of the Seamless Tube Manufacturer which held its shareholder meeting on Thursday.
All of these contracts, which have a duration of three to four months, are optimized in terms of margins and are of high value, as TR asserts, “to minimize the risk of developing costs and maximize the outcome.” In fact, the steel company proposes budgets to its customers who only have one Power 24 hours. After this period, they withdrew the proposal due to the aforementioned fluctuations in costs.
Alava steel company maintains its profit forecast for next year and has left behind a streak of losses for seven consecutive years. The crisis rescued 112.8 million sippi which, after renegotiating debts with banks, allowed it to open a cost adjustment plan without layoffs. With two steel mills, it closed one in Sestao (Bizkaia) and concentrated its main activity in Amorio.
This reorganization means the transfer of 80 employees to Amurrio, as specified Carlos Lopez de las HerasCEO of Tubos Reunidos. In addition, 60 people signed up for the voluntary layoff scheme, 82% of whom have already left the company. The workforce, as of December 31, consisted of 1,300 workers. The plan includes investments of $60 million to boost Amurrio’s facilities, among other divisions.
In the first five months of the year, TR sales increased by 125%, accounting for 220 million, and Ebitda’s operating profit totaled eight million, compared to the previous negative result.
With oil and gas prices at record levels, TR can benefit from reactivating operations and initiating investments that were previously crippled. The US and Europe are driving demand, a scenario that extends to seamless pipe-intensive refining and petrochemical operations.
TR also wants to subscribe to the business opportunities that the energy transition offers. It already has orders related to geothermal, photovoltaic and offshore wind, without neglecting its clients in the nuclear sector in France and the United Kingdom. It expects to continue generating positive Ebitdas in the coming months, despite the above-mentioned uncertainties rocking the economy.
Now he has to contend with collective agreement negotiations with unions, with inflation soaring 10.2%, the highest in 37 years. Errazusta hopes that talks with the power plants will take place “constructively” to maintain job stability and not change the company’s business. One formula might be to mitigate rising inflation over several years.
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