Decision on temporary suspension of work of the Warehouse in Katowice

In connection with the fact that on 2 April 2020 among employees employed at the STALPROFIL SA Warehouse in Katowice at ul. Owsiana 60a two cases of COVID-19 infection have been confirmed, the Management Board of STALPROFIL SA, striving to eliminate the risk of further spread of coronavirus, decided to temporarily suspend work of the above warehouse and redirect orders from recipients to the second Commercial Warehouse located in Dąbrowa Górnicza.
The work of the warehouse has been suspended until further notice and will be restarted in consultation with the Provincial Sanitary and Epidemiological Station in Katowice, which the Management Board of the Company immediately informed about the event.
According to data for 2019, the Company, via the Warehouse in Katowice, realized about 23% of its total sales revenue. The vast majority of the shipments carried out so far by the Katowice warehouse will be taken over by the Dąbrowa Górnicza warehouse, which has high reloading capacity and a similar commercial offer.
Until this report, the STALPROFIL SA Capital Group did not significantly suffer the negative effects of the epidemic.
On the steel distribution market, orders are processed smoothly by suppliers. Domestic sales and export sales remain at an average level (despite temporary difficulties that occurred in international transport). Also on the gas transmission infrastructure market, contracts are completed on time. There are no disruptions in the supply of insulated steel pipes and gas pipelines, there are no staff shortages. Employees carry out their tasks according to the schedule. There are also no supply disruptions related to the epidemic that could have a negative impact on margins and meeting contract deadlines. Only difficult contact with the offices that issue administrative decisions regarding the construction of gas pipelines is observed.
In response to the dynamically changing situation related to the state of epidemic threat, the Management Boards of the Group companies implement a number of organizational solutions that: increase employee safety and ensure the Group's continuity.
Both markets, i.e. the steel distribution market and the gas transmission network infrastructure market, have so far operated without significant disturbances. There is a risk, however, that the prolonged epidemic duration will destabilize both markets. An epidemic may cause: decrease in sales, worse flow of receivables, shortages in supply, employee absence, weakening of the Polish currency exchange rate, fluctuation in the prices of goods and raw materials for metallurgical production, which in turn may have a negative impact on the results of the STALPROFIL SA Capital Group in 2020.
At present, it is not possible to provide precise figures on the potential impact of the epidemic on the Group.