Indonesian steel company, Krakatau Steel, achieved USD 74.1 million profit in the first quarter of CY’20. The company’s cost savings in Q1 stood at USD 130 million. However, with the current economic condition, the company’s performance in the next quarter might get affected.
“Due to efficiency efforts, Krakatau Steel succeeded in making cost savings of USD 130 million in the first quarter of 2020. However, conditions in the second quarter are expected to be different due to the condition of the steel market which has weakened to around 50% due to the current economic condition of Indonesia experiencing pressure due to COVID-19 pandemic. The weakening national economy has an impact in the steel industry. This, if continued, is expected to have an impact on the performance of 2020”, Company’s Director Silmy Karim said.
To cope with the impact of COVID-19 in the steel industry, the company with the help of the government is trying to keep downstream industries and user industries in operation.
“We hope that the economic condition in the third and fourth quarter will improve, so that Krakatau Steel can return to profit as in the first quarter of 2020 and this year Krakatau Steel can book profits as planned after the completion of Krakatau Steel’s restructuring”, Silmy concluded.
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