Turkish steelmaker, Kardemir incurred losses despite a rise in crude steel production in H1 2020 from the prior-year periods. COVID-19 outbreak dampened demand in both, domestic and export markets impacting the steelmaker’s sale and thereby its income.  

The company aims to supply 647,000mt of finished steel. Sales for billet and blooms are estimated to be around 256,000mt and rebar at 160,000mt. It expects better performance in Q3 on the back of demand recovery as well as bullish global scrap prices in June. 

Production 

In the first half of 2020, the company produced 1.24mn mt crude steel, up by 9.7pc from 1.138mn mt in H1 2019. Production of finished long steel was 1.19mn mt, up by 7.5pc from 1.11mn mt in H1 2019. Pig iron production was 1.13mn mt, up by 8.6pc from the year prior.

Kardemir’s capacity utilization rate rose to 67.7pc in the period from 63.99pc a year earlier. 

In April-May, production had declined by 15-20pc amid fewer shifts at most plants and overall instability in the steel market. Markets started to improve from June and production reached pre-COVID-19 levels in mid-June. 

 

Financials 

In H1 2020, Kardemir recorded revenue of TRY3.25bn ($501.8mn). Revenue fell marginally by 0.6pc from H1 2019 in line with a drop in sales of long steel by the company at 1.182mn mt in H1 2020 from 1.19mn mt in H1 2019. 

The company’s operating loss stood at TRY83.8mn ($12.9mn) in H1 2020 against the operating profit of TRY233mn ($41.5mn) in H1 2019. Net loss was at TRY267.8mn ($41.3mn) compared to a profit of TRY70.2mn ($30.3mn) in H1 2019. 

 

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