Intermoney | The company informed the National Securities Market Commission (CNMV) yesterday, with the market closed, the cessation of activity in the factory of Bahru Stainless (Malaysia) and the change in the operation model in the factory of Acerinox Europe, located in Cadiz.
Regarding the Malaysian factory, Acerinox has already informed its Asian customers about the cessation and has assured that the supply to these customers will be made, from now on, from other factories of the group. Regarding the Algeciras factory, due to the market conditions and the results of the last years, Acerinox has communicated that it is going to operate the plant in three shifts, instead of five, which will be communicated as soon as possible to the legal representation of the workers.
Assessment: Positive news, as we see it as a necessary measure due to the current market situation both in Europe and in Asia, where prices were unsustainable due to the overproduction in China. It should be remembered that the Bahru plant has accumulated losses of -€527mn since 2018. In the Algeciras plant this will aggravate the strike situation that started on 5 February, but we see it as a necessary measure due to the current market situation. We reiterate our buy recommendation with a P.O of €15.
