- Aluminium manufacturer Capral (CAA) is continuing to operate without major interruptions, despite the ongoing COVID-19 pandemic
- The company has largely avoided the virus’ impacts through cost-saving measures, hygiene protocols, and savings from a previous project
- Despite forecasts of declining construction later this year, Capral expects the government housing stimulus to boost customer demand
- The company isn’t currently able to predict demand or results for 2020’s second half, or provide full-year guidance
- Capral shares are steady on the market today, trading for 10.5 cents per share
Aluminium manufacturer Capral (CAA) is continuing to operate without major interruptions, despite the ongoing COVID-19 pandemic.
Despite the economic instability and uncertainty which the virus has caused, the company has managed to avoid most of the impacts. This showed in Capral’s results for 2020’s first quarter, which were in line with the company’s budget and guidance.
However, some small impacts began to show in March, when demand for the company’s aluminium products started to slow. This coincided with the implementation of COVID-19 restrictions and social distancing policies in Australia.
But Capral was largely able to mitigate these early issues through a number of cost-saving measures. These included 20 per cent reductions in staff salaries, through reduced working hours, and use of paid or unpaid leave.
The company also reduced the director’s remuneration by 25 per cent, and deferred discretionary and non-essential spending and capital expenditure.
Starting in April, Capral also implemented safety and hygiene protocols, such as arranging for non-operational staff to work from home.
These various actions helped the company evade the worst of the pandemic’s effects. The company also benefitted from savings earned during the Bremer Park restructure project from last year.
Looking forward, the company is planning for a continuation of “soft” customer demand.
Forecasts suggest that 2020’s second half will see a decline in residential and commercial construction activity. However, Capral expects that the recently announced housing stimulus from the government will improve the market for housing materials.
The ongoing negative impacts of the pandemic, versus the positive impacts of government stimulus packages makes the future hard to predict. This uncertainty has left the company unable to predict demand and results for the second half of 2020.
As such, Capral has stated that it is not currently in a position to provide full-year guidance. However, the company maintained a positive outlook about the uncertain times ahead.
“We are confident that Capral will continue to trade profitably through these challenging times.
“Capral remains very well-positioned to take advantage of organic and acquisition growth opportunities in the future,” the announcement said.
Capral shares are steady on the market today, trading for 10.5 cents per share at 10:29 am AEST.