Aceros Arequipa is delaying construction of its new steel plant from this year to February 2021 because of COVID-19’s disastrous economic impact.
The new steel plant, called Nueva Acería, comes at a cost of $180mn and is expected to produce 2.5mn t (2.3mn mt) of crude steel annually, according to the company.
Aceros Arequipa is implementing a plan to improve its operations, which includes postponing all investments until further notice and reducing its inventories by December 2020, the company said in a statement.
The Peruvian company’s steel sales decreased on an annual basis by 16.5pc to PEN637.2mn ($184.3mn) in Q1 2020 because of suspended operations after Peru’s government decreed quarantine in March when the pandemic started.
The company reported a net profit of PEN39.3mn in the first quarter of this year, decreasing by 9.1pc from its Q1 2019 net profit of PEN43.2mn. Aceros Arequipa’s EBITDA also decreased by 0.7pc to PEN91.5mn in the first quarter of 2020 from PEN92.1mn during the comparable period last year.