Aperam revises Q3 guidance downward due to operational disruptions
Aperam, the Luxembourg-based steel manufacturing firm, announced on Monday a downward revision of its third-quarter guidance, leading to a decline in its share value. The company's shares fell by 3.1% to EUR 26.26 on Monday, after experiencing a drop of up to 12% earlier in the trading session.
Last Friday, Aperam issued a statement indicating that the anticipated adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for Q3 would be between 15 million euros and 20 million euros ($16 million-$21.3 million). This is a significant decrease from the previous expectation based on the second quarter's results of EUR103 million.
In addition to the revised EBITDA forecast, Aperam reported an increase in inventory valuation losses beyond initial expectations. The losses have escalated to a triple-digit million figure, while the company had previously predicted high double-digit million losses assuming stable raw material prices.
The company also updated its estimates regarding production volume for the third quarter. Aperam now expects volumes to be on par with those of the second quarter, deviating from their previous forecast which had suggested slightly higher sequential volumes.
The shift in guidance is attributed to two unexpected incidents that disrupted operations. Firstly, there was an extended pause at the Genk upstream facility to facilitate the development of a new argon oxygen decarburization project. Secondly, operational issues occurred at the melt shop in Chatelet, which resulted in a considerable reduction in shipments during the quarter.
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