Coronavirus - World on lockdown
1 April 2020
We have looked at all the lockdowns currently in place around the world, and found that 38% of the global population is currently affected. Clearly, the scale of lockdown is different in each country, but these all have social distancing and stay-at-home measures in place. It is noticeable that every country that has approached its release date has extended it for more days or weeks, with the latest including Bangladesh, Italy, Greece and Denmark. There are tentative hopes from some countries of allowing a gradual release post-Easter, but it is highly likely that the lockdowns will be further extended.
•The Netherlands has banned all public gathering until 1 June
•Japan’s business sentiment indicator the Tankan dropped to a seven-year low
•Government letter to construction industry link
•FRC supports issuance of up to 20% equity capital link
•PRA letters to banks link
•PRA letter to insurers link
•FCA relaxes 10% rule for PCW link
•Edinburgh festivals cancelled
•US President Donald Trump urges Americans to follow guidelines, calling it “a matter of life and death”
•The ‘Body Coach' home PE classes raise £80,000 for the NHS
•Some 1,400 3D-printer owners have pledged to use their machines to helpmake face shields for the NHS.
Buildings & construction
• Breedon – ‘Following our announcement on 26 March, in which we confirmed that our operations in the Republic of Ireland (RoI) would continue to operate pending further guidance, the Irish Government introduced restrictions on 27 March requiring all non-essential businesses to close for two weeks from that date.
We have therefore decided temporarily to suspend production at our RoI sites, including our cement plant at Kinnegad, with the exception of those serving health projects and critical road and utility infrastructure. We welcome the Irish Government's Wage Subsidy Scheme, which should ensure that eligible employees continue to receive a proportion of their pay while they are not working.’
• Norcros – ‘The Group has continued to win market share in its major markets despite conditions remaining challenging and up until recently remained in line to meet market expectations for this financial year. Recent Government measures in both the UK and South Africa to contain the spread of the COVID-19 pandemic means that this is now no longer the case as demand in our seasonally important Period 12 has slowed markedly as our customers have focussed on how they mitigate the risks of COVID-19.
Impact of the COVID -19 pandemic - On 20 February 2020, we reported that the slower than anticipated return to full production at our China based suppliers would impact this year's financial performance. Whilst our China supply chain is now operating at close to normal levels the nature and the extent of the commercial impact has changed significantly moving from a supply chain issue into a global demand one.
The South African Government issued a directive on 23 March 2020 requiring a 21-day national lockdown, effective midnight 26 March 2020 to midnight 16 April 2020 in order to contain the spread of the COVID -19 pandemic. Consequently, we have mothballed all of our operations and trading has ceased. The situation however remains fluid and is being closely monitored and actively managed.
In the UK, we have been in active discussions with our customers to better understand how they are planning to trade during the coming weeks following the recently introduced Government measures.
It is now evident that the majority have temporarily closed their main outlets except for products which are deemed essential and sold through their click and collect operations. Trading is therefore minimal. Consequently, we have suspended our main manufacturing and assembly operations in the UK in a controlled way to safeguard our workforce and to ensure an efficient resumption at the appropriate time.
We now expect our underlying operating profit2 for the year to 31 March 20201 to be approximately £31m compared to the previous consensus forecast of £35m. All of this reduction is attributable to the COVID-19 situation, is considered both temporary and exceptional, and follows a period of robust trading including market share gains.
Given these circumstances and the high degree of uncertainty, we are suspending our previous guidance for the financial year 2020/21.
Short term COVID -19 response measures - Immediate action has been taken to preserve the cash flow of the business. Actions include deferring all non-essential capital expenditure and all discretionary operating expenditure.
We have very well-established relationships with our customers and suppliers, and we will continue to prudently manage our working capital given the current level of uncertainty.
We welcome the recent measures announced by the UK Government to support businesses through this challenging period and the Group will look to use this support where applicable. Our cash flows will benefit from a number of them, furthermore we will access the Government's Job Retention Scheme to help us secure jobs during the suspension or curtailment of our operations.
Financial position and liquidity - The Group is in a strong financial position and has a low level of net debt2. Year-end net debt2 is expected to be c.£40m and leverage (net debt2 to EBITDA) circa 1.1x. Our bank covenant ratio is for net debt2 to EBITDA to be less than 3.0x.
The Group has access to a £120million committed RCF financing facility, plus a £30million accordion facility, which mature in November 2022 and has drawn down £84m on the RCF facility to ensure that it has sufficient short-term liquidity.
We have modelled a number of different potential scenarios of different durations and severity including periods of nil revenues followed by periods of reduced revenues and assessed the impact on both profitability and cash flow over the next 12 months. We are confident that with the actions being taken to preserve cash and the financial resources available to it, mean that the Group is well placed to withstand an extended period of reduced trading.
Dividend - The Board will consider the appropriateness, quantum and timing of any final dividend payment for this financial year when it has a clearer view of the scale and duration of the COVID-19 impact on the business.’
• Taylor Wimpey – ‘The Committee has taken the decision to use its available discretion to amend the application of the Remuneration Policy for 2020 and we announce the following changes to the Executive Directors' remuneration for this year:
• The 2% annual salary increase due to come into effect on 1 April 2020 has been cancelled;
• The Executive Incentive Scheme (annual bonus) has been cancelled and there will be no cash bonus payable in respect of the Company's performance in 2020; and
• A voluntary 30% reduction in base salary and pension for the duration of the Government-imposed lockdown. In the event that the lockdown continues beyond 30 June 2020, the Remuneration Committee will review this particular matter again at that time.
The decision to take a reduction in base salary is supported by the whole Board and therefore the Non-Executive Directors will also take a 30% reduction in their fees for the same period of time. The objective of these changes is to conserve cash, with a particular focus on protecting the long term financial security of the business as a whole, for the benefit of all of the Company's stakeholders.
• Watkin Jones# – ‘As announced on 27 March, we have begun to experience significant disruption to our operations as a result of the COVID-19 outbreak. Our non-site based staff are currently working from home, in line with our established Business Continuity Plan, and we have halted all non-essential work on our construction sites. This will inevitably impact financial performance, whilst these measures are in place. We have a strong forward sold delivery pipeline for delivery over the next two years. However, it is difficult to predict the scale of adverse impacts caused by further disruption to our operations, or to forward sale markets, at this time. The Board therefore believes that it is appropriate to withdraw financial guidance at the current time, with the intention to reinstate it as soon as the backdrop becomes more stable.
Notwithstanding the challenging current backdrop, the Board believes that the long-term outlook for both the student accommodation and BtR sectors remains strong. These markets are underpinned by robust fundamental growth drivers, which will continue to appeal to institutional investors. The Group is confident of further enhancing its position as a market leader over time.
Liquidity - Watkin Jones has entered this unprecedented period of market uncertainty well positioned, with a 'capital light' business model. The Group has forward sold all of its 2020 developments and eight out of ten of its developments scheduled for delivery in 2021 to institutional partners, which provides cash flow and earnings visibility. At 31 March 2020, the Group had a gross cash balance of circa £71 million and a net cash balance after deducting site specific loans of circa £36 million. In addition, the Group has in place a £60 million RCF to primarily support land procurement and development opportunities, of which only £29 million was drawn down as at 31 March 2020.
Whilst the Group has a resilient financial position, the Board believes it is prudent to adopt a cautious approach to new investment, as well as to introduce measures to manage costs and conserve cash, until the extent and duration of the disruption caused by COVID-19 is better understood. The Board therefore does not intend to declare an interim dividend alongside its results for the six months to 31 March 2020. It will reinstate dividend payments as soon as appropriate. Furthermore, the executive directors will not receive an annual pay increase, which would otherwise have been due on 1 April 2020, and until normal construction activity is resumed, the non-executive directors will waive 20% of their fees.
• Argentex – ‘Argentex is expecting to report a c.30% increase in revenues to c.£29 million for the 12 months to 31 March 2020 (2019: £21.9 million), with Foreign Exchange ("FX") Turnover exceeding £12bn (2019: £10.8bn). The Group continues to experience very strong growth in customer numbers, adding 450 new corporate clients during the period, while corporate clients actively trading increased by 12%. Following the Group's sustained excellent financial and operational progress, the Board is confident the Group will meet its full year profit expectations.
The Group's robust business model, balance sheet strength and approach to risk mitigation have ensured continuity of service for Argentex's diverse and sophisticated client base throughout the recent unprecedented market conditions resulting from the outbreak of COVID-19.
While client demand has grown throughout the period, the currencies traded has remained consistent with historic trends, and at the end of the period over 95% of the LLP's FX portfolio is comprised of Dollar, Sterling or Euro trades. Argentex's revenue composition has maintained historic stability between spot and forward, and furthermore there has been a positive uptake by the Group's professional clients for FX Options products in their commercial hedging. The options book continues to grow organically, and has reached the scale where it is now making a material revenue contribution.
COVID-19 - Since the outbreak of COVID-19 and consequential government enforced actions, the priority has been to protect the health and safety of employees and their families. In line with government guidelines, Argentex has successfully implemented its Business Continuity Plan, requiring all staff to work remotely.
Operationally, Argentex's prudent and proactive approach to risk management and controls has resulted in no change to the trend of historically low levels of bad debt. Management continue to monitor client profiles, activity and macro-economic conditions as part of our rigorous processes, procedures and policies.’
• Finn Cap– ‘The Board is pleased to announce that the Group's trading performance since the announcement of 27 February has been in line with the Board's cautious expectations set out at that date. The second half trading performance is expected to be broadly breakeven with the equity capital markets division performing in line with the first half and the M&A division behind, as was previously stated. Turnover for the year is expected to be approximately £25.8m (11 months ended 31 March 2019: £24.5m).
An indication of how rapidly the world has changed is that on 27 February we only noted the spread of Covid19 and yet five weeks later the government has implemented extreme social and economic measures in response to Covid19 and the United Kingdom is now in a "lockdown". Clearly these factors are expected to have a material negative impact on the Group's performance in the financial year to 31 March 2021 ("FY 2021"). However, the nature and the timescale of such impact is currently very uncertain. For the time being we still have a strong pipeline of M&A deals for Q1 FY 2021, albeit we expect to see a number of deals pulled or delayed, and the equity capital markets division continues to complete transactions.
In response to recent events the Group has moved all of its employees to remote working and is pleased to note this has had no material impact on our ability to operate to date. The Board has also reviewed the Group's operating expenses and taken swift action to minimise the financial impact of the uncertainty caused by Covid19. The measures taken include salary and fee sacrifices for all Board members for a period of three months (being 100 per cent of fees for non executive directors and between 92.5 per cent. and 44.0 per cent. of salary for executive directors), salary sacrifices by Group employees for three months, the furloughing of a number of staff and the cancellation or deferral of all discretionary expenditure. Together with the cost reductions referred to in the announcement of 27 February (which included the closure of the Slide Rule Fund), these actions -will reduce the cash monthly operating expenses of the Group to be 31% lower than those incurred in February 2020.
The Board intends to maintain a strong balance sheet and currently has financial resources well in excess of its regulatory requirements. The Group will take advantage of its ability to defer payment of VAT in line with the government's proposals. The Board has also taken the difficult decision that it will not pay the second dividend for the year ended 31 March 2020 in light of the current crisis and the cash conservation measures outlined above.
The Board is planning for a very difficult trading period ahead, particularly in the Group's M&A division. In light of this it is pleasing that the Group's equity capital markets division has continued to advice on deals throughout the last few weeks including equity fundraises for Synairgen plc, PCI-Pal PLC and Trackwise Designs PLC, and some of the fees associated with these will be recognised in FY 2021. The Group has also continued to generate secondary trading commission, make markets profitably, sign up retained clients in the equity capital markets division and secure mandates in the M&A division since the beginning of March.’
• International Personal Finance – ‘Further to our statement on 20 March 2020, the Company announces the following developments in connection with the Covid-19 pandemic.
Regulatory changes - Regulators and governments in a number of our markets have implemented, or are considering implementing, temporary consumer lending measures in response to the pandemic. These include debt repayment moratoriums and new or lower pricing limits.
In Poland a reduction in the cap on non-interest costs of credit for new lending has been approved for a period of one year, after which the cap will revert to historic levels. The flat level of the cap is reduced from 25% of the loan value to 15% and the additional variable cap from 30% to 6% per annum, with the aggregate total of the caps not to exceed 45% of the loan value.
In Hungary, the government has implemented a debt repayment moratorium for consumers until the end of the year; borrowers can opt out if they wish to continue to pay-down their loans. Additionally, for the same period, the maximum APR applicable to new consumer loans has been temporarily reduced to national bank base rate plus 5%.
In Romania, a debt repayment moratorium until the end of 2020 is available for customers not in default. Additionally, we understand that proposals for a 6 month debt repayment moratorium are being discussed in the Czech Republic.
Collections - Although largely unaffected through to the first half of March, collections in our home credit businesses are now being significantly adversely affected as tighter restrictions are imposed on the freedom of movement of individuals. Our immediate priority has been to safeguard the health and safety of our employees, agents and customers. In designing and implementing measures to achieve this, we have sought to mitigate, as far as reasonably possible, the impact on our operational and financial performance.
We have suspended agent visits to customers in Poland (except where requested by customers), Hungary and Romania. In Poland remote payment options are available and similar processes are being established in our other European Home Credit countries. In Hungary, pending discussions with the Hungarian National Bank on how to manage the implementation of the customer opt-out mechanism, we expect to recommence agent visits in the coming weeks. In Romania, we also plan to resume agent service shortly having enhanced protocols to protect the health of our agents and customers. Although we have seen limited impact in Mexico home credit to date, we are using lessons learned in Europe and taking actions now to protect our people, customers and the business in anticipation of this market being affected further by Covid-19. We have also tightened credit settings in IPF Digital which operates an end-to-end remote digital customer journey.
Liquidity actions - credit issued, costs and capex -While it remains too early to quantify the potential financial impact of the pandemic on our businesses, the Group is taking a number of actions to protect liquidity through this period of uncertainty. Capital expenditure and 2020 salary increases (including those of our Executive Directors) are being deferred, costs are being reduced, and discretionary expenditure curtailed. Additionally, in response to reduced collections and in some cases tighter price caps, we have significantly restricted our lending across all of our businesses.
Funding position and dividend - In light of the uncertainty caused by the pandemic and its operational impact in the Group's markets, the Board believes that conserving cash and maximising financial flexibility is in the long term best interests of the business and its stakeholders. The Board has decided therefore to cancel the proposed annual final dividend payment of 7.8p per share which will result in a cash saving of £17.3 million. Accordingly, proposed resolution 4 in the notice of annual general shareholders meeting circulated to shareholders on 25 March 2020 recommending the final dividend will be withdrawn.
The Group has a strong balance sheet, and at the end of February 2020 had an equity to receivables capital ratio of 45% and headroom on undrawn debt facilities of £203 million. Whilst the duration and magnitude of pandemic related changes is difficult to predict, we have undertaken liquidity stress testing on the business under various scenarios to assess the impact of a further deterioration in collections performance. This analysis demonstrated that, in response to the pandemic related changes, we can manage cash flows by reducing lending volumes to retain adequate operational headroom against our debt facilities.
Food, drinks & household
• Chapel Down– ‘Following the Governments advice to close pubs, theatres and hospitality venues to contain the spread of the virus, we have seen our sales in supermarkets and off licenses grow substantially and our on-line sales multiply dramatically as customers seek to continue to enjoy our brands at home.
It is too early to extrapolate any trends but if the current sales rate continued the off-trade sales and on-line growth of our wines would more than make up for the loss of on-trade wine sales. It will certainly leave us with a stronger business and an increased market share in these areas where we see long term growth.
Sadly, we needed to close our tours, shop, restaurant and bar at the state of the art Curious Brewery in Ashford and our hospitality, shop and tours at our beautiful winery in Tenterden. Given that our beer and cider sales are largely focussed on the on-trade, in order to conserve our cash, we have taken the decision to stop brewing and close the brewery until the on-trade returns to normality. We have sufficient stocks / work in progress to trade through with bottled product to take home and online customers for up to 6 months.’
• Futura – ‘To date we have not seen a material impact as the Company is used to operating as a virtual business and we have been able to transition quickly to a fully remote and flexible working model with ease.
We are currently not conducting any trials requiring the use of patients or healthy volunteers. All operational activities can be managed using existing internal resource combined with our extensive resource of external consultants and sub-contractors should any of our employees become ill. We therefore currently expect limited impact from COVID-19 during 2020.’
• Spire – ‘Spire Healthcare (LSE: SPI), a leading UK independent hospital group, today announces that its lenders have agreed to waive the covenant testing required under the Company's Senior Facility Agreement for the two forthcoming scheduled test periods on 30 June and 31 December 2020. This waiver will provide further flexibility to Spire Healthcare through, and in the period after, its partnership with the NHS.
The agreement signed with NHS England on 21 March 2020 will provide Spire with sufficient liquidity and financial stability during the COVID-19 outbreak as the Company is paid weekly in advance. In addition, the Company has an undrawn revolving credit facility of £100m that remains available.
Further, the Spire Healthcare Board has decided that, due to the current COVID-19 uncertainties, and in view of its new relationship with the NHS, it would be prudent and in the long term interest of shareholders and stakeholders to suspend dividend payments until the current crisis is over. Accordingly, the Company will not be putting forward for approval to shareholders at its forthcoming AGM the previously announced 2019 final dividend payment of 2.5p per share.’
• Foxconn – said it can still make the deadline for the Apple 5G iPhone lauch. “We and the customer’s engineers are trying to catch up the missing gap, after we lost some days due to travel ban. There’s opportunity and possibility that we might catch up….But if there’s a further delay in the next few weeks, months, then you probably have to reconsider launching time. It’s still possible.” Alex Yang Investor relations at Hon Hai Precision Industry.
• LPA Group – ‘A number of UK and export customers have temporarily suspended operations. In response LPA is reducing current production capacity to match demand, reduce costs, conserve cash and utilise government initiatives to support the Group.
All three units will remain open. Flexible working has been introduced to accommodate childcare, and where practical staff are working from home. Staff segregation and self-isolation precautions have also been introduced. A significant proportion of the staff have been furloughed as we move through this period. At each site, staff and capabilities will be maintained to respond to, and deliver on, customer requirements.
Output, which had been expected to accelerate through March to the end of the year, will now be scaled back. However, orders received have comfortably exceeded sales during the first half, so the order book has continued to grow and remains at record levels which provides optimism for the medium term.’
• Renew – ‘the Board expects the Group's trading in the first half of the year to be in-line with market expectations. We are also pleased to confirm that the integration of Carnell, acquired in January 2020, is going well and its trading performance has been in line with our expectations.
The potential impact of Covid-19 on the Group's trading performance in the second half of the year is unclear at this stage. We remain, where safe to do so, operational across the majority of our sectors, but we are experiencing disruption in certain areas. In Rail and Highways, which account for the majority of our engineering activity, we are working closely with our public sector customers in areas designated critical to the Covid-19 response. In both cases there is a clear commitment and ongoing demand for our directly delivered maintenance and renewal services. Water and Telecommunications have also been designated 'critical sectors' and we remain operational here too, with key workers deployed across all network areas where we have framework contracts. Our services in civil nuclear have been disrupted with a temporary cessation of programmes at Sellafield and Springfields where both customers are developing plans for resumption of critical activities that will require our involvement. In total, approximately 80% of our activities are in areas deemed critical to the Covid-19 response.
Cash generation in the first half of the year has continued to be strong and the Group's net debt as at 31 March 2020 is anticipated to be between £15m-£17m. Included in this amount is the balance outstanding on the term loan used to fund the acquisition of QTS which was £17.5m. The Group recently re-financed its working capital facilities as part of the acquisition of Carnell in January 2020 and now has a revolving credit facility ("RCF") provided by HSBC & NatWest of £44.2m, expiring in January 2024. In addition, the Group has a £10m unsecured overdraft facility. As at 31 March 2020, we anticipate having headroom in our available facilities of approximately £55m plus a £15m uncommitted accordion facility on the RCF.
Since the escalation of the Covid-19 pandemic, the Board has been focussed on taking actions to preserve cash and protect liquidity in a way that does not compromise the long-term prospects of the business. These include deferral of all non-essential capital expenditure, a hiring freeze, cost reductions, deferral of VAT payments (£2.6m deferred in March), utilisation of the Government's Job Retention Scheme and a temporary 20% reduction in the salaries of the Board and senior management from 1 April 2020. In addition, the Board has decided to suspend payment of the interim dividend which would ordinarily have been paid to shareholders in July. We understand the importance of the dividend to our shareholders
• RHI Magnesita# – ‘The global impact of the COVID-19 virus is a fast moving and uncertain situation. Our primary focus is the health and safety of our employees around the world. We have continued to operate our production capabilities and supply chain, enabling us to deliver for customers as normal. In China our plants have remained open through the crisis, with employees safe. Across the rest of the world, plants are also open and are operating with strict restrictions such as pre-work temperature checks and no travel between plants. All corporate offices are closed with employees working from home. Whilst we have seen no material financial effects on our business to date, the impact of COVID-19 on demand from our customers is very uncertain. We are engaging customers closely to understand their current production rates, stock levels and short-term requirements.
RHIM notes the FCA's request to UK listed companies to delay the announcement of preliminary financial accounts during the current period of unprecedented events caused by COVID-19. The Board of RHIM has considered the FCA's request, however on balance believes that it is better to announce the Group's 2019 full year results on the 1 April 2020 as originally planned. In arriving at this decision, the Board has considered that the publication will provide clarity on the Company's 2019 financial position and that the Company will be publishing audited and not preliminary results.
Despite the Group's strong financial position, the uncertainty relating to COVID-19 means that alongside the efficiency measures we are taking to preserve cash, the Board has decided not to recommend the payment of a final dividend for 2019. This decision will be reviewed later in the year once the outlook becomes clearer. The Board believes that this is an appropriate and prudent measure to take as it seeks to preserve RHI Magnesita's strong liquidity, cash flow and financial position through these uncertain times.’
• Robinson – ‘At present we have seen an upturn in demand for some of the products we manufacture, including hand wash containers and other personal care, household and food packaging. To the extent this is driven by stocking (as opposed to usage), this may reverse over time.
The largest threats to our business are still to materialise and difficult to predict in this fast-changing environment, but we can envisage that the possibility of staff shortages or lockdowns may restrict our ability to manufacture products in our plants in the UK and Poland.
We have undertaken a stress test of our business and concluded that although there are some risks to our business from smaller customers, who fail to survive the pandemic (both in terms of future revenues and potential asset/debt write-offs), our financial position remains strong. Of course, it is difficult to predict the impact of these or the longer-term impact on supply chains or property values due to the significant uncertainties that remain.’
• Tata Steel – ‘In line with the increased action taken by national governments to contain the spread of COVID-19, Tata Steel will be reducing operations at some sites. We have already stepped up measures to reduce risk to our employees across all our sites as well as the communities around. Strict travel restrictions have been implemented and majority of our employees have been asked to work from home. Additional resources are being put in place to increase hygiene standards at all locations and enforce strict social distancing norms for employees and other stakeholders who have to attend to essential activity at workplace.
These are unprecedented times and the situation on the ground is evolving very rapidly and we are working closely with customers and suppliers and various Government agencies to mitigate these impacts as far as possible. We are monitoring the situation closely and stand ready to review these decisions based on the developments on the ground. An update on our key operations across geographies are as follows.
• India: The Government of India has announced a 21-day nationwide lockdown effective March 25, 2020 to combat the spread of the Covid 19 virus amongst communities and have issued guidance for Work from Home, social distancing norms to be followed and hygiene at home and workplace. The Government of India and respective State Governments have also issued notifications and clarified that Mines, Steel, Coal, Power Fertilizers etc are essential services and process industries where the continuous operations of the plant facilities are important, and are exempt from the lockdown measures and can continue to operate subject to the hygiene standards and social distancing norms being followed. Based on the specific guidance and approvals received from the relevant District Administration, the company’s mining operations have been operating normally but the integrated steel facilities in Jamshedpur, Kalinganagar Angul (Tata Steel BSL) and Gamahria (Tata Steel Long Products) have started reducing production levels and operations in the downstream facilities have been suspended and put on care and maintenance mode. In view of the restrictions in the despatch of finished goods and poor market conditions due to the shutdown of customer operations in automotive, construction and other segments, shipments to customers have been curtailed. The company is focused on conserving cash and liquidity and are reducing the cost base to align with the operating and market situation with strong focus on working capital management. All payments to MSME vendors and contract workers are being done on due dates.
Tata Steel is keeping a continuous watch on the evolving situation and has taken several initiatives to ensure that the operations are in a state of readiness to ramp back and serve our valued customers as the situation improves and normalcy is restored. To minimise the presence of employees at workplace, including at our steel making hubs and mining operations, appropriate protocols have been put in place.
As a responsible corporate, Tata Steel continues to work with the respective state governments and district administrations to help in this hour of crisis. In Jamshedpur, the Company is working to ensure that there is no interruption in basic civic amenities for the citizens of the city and all emergency services including Tata Main Hospital continue to operate normally with the support of the dedicated doctors, nurses and the support staff of the Hospital. Tata Steel has also been working closely with the Government of Jharkhand and Odisha to create modern and well-equipped isolation centres with 1,000 beds in Jamshedpur, Kalinganagar and Gopalpur. In addition, Tata Steel Foundation has also taken up the initiatives to work with Jamshedpur District Administration to launch the Thought for Food program to provide nutritious meals to 50,000 most vulnerable people including 80 settlements in and around Jamshedpur. The Foundation is also undertaking digital outreach program to 200 Gram Panchayats in Odisha and Jharkhand covering more than 10000 people to spread awareness of Covid 19 and the hygiene precautions to follow.
• Europe: Tata Steel Europe is cooperating with national guidelines of the relevant countries and has updated measures to reduce risk to employees across all sites.
We are committed to continue to supply steel products vital for society, including for food packaging, where demand has increased for canned food.
However, overall European steel demand has sharply reduced compared to the normal conditions and many of our customers have paused production, including European car manufacturers. Tata Steel Europe has therefore reduced production at some of the European mills to match this lower demand. The business is focused on preserving cash and liquidity to tide over the challenging period.
Tata Steel Europe is currently operating all four blast furnaces at a reduced level across the two steelmaking hubs – in Ijmuiden in the Netherlands, and Port Talbot, Wales and despatches to customers is currently continuing at the revised levels. The situation is under continuous review and the management is prepared to take swift actions depending on the trading conditions.#corporate client of Peel Hunt
To read the full research note, please click here