Effects on the Group’s Semi-Annual Performance and Liquidity
The COVID-19 pandemic had a massive impact—worldwide and at the macroeconomic level—on the first half of the business year 2020/21. Due to the restrictions on air travel, the globally declining demand for energy, and the production stoppages of automotive manufacturers during the lockdown, the aerospace, oil and natural gas as well as automotive industries were hit hard by the fallout of the COVID-19 pandemic. The automotive segment is already seeing a substantial rebound, whereas aerospace as well as oil and natural gas are still feeling the brunt of the COVID-19 pandemic. Revenue declined compared with the same period of the previous year due to the production stoppages and capacity reductions, particularly in the aforementioned segments. Above and beyond the consistent application of cost optimization programs, investments not absolutely necessary at this time were postponed. These postponements do not have a negative effect on the voestalpine Group’s current business. The measures described above led to a highly positive liquidity position as of September 30, 2020 (see the Notes on the consolidated statement of cash flows).
The Group availed itself of various support measures during the first half of the business year 2020/21 on account of the worldwide COVID-19 crisis. In Austria, many Group companies implemented a short time work model, and foreign subsidiaries at a number of sites utilized programs similar to the Austrian short time work program for some of their employees. Resulting refunds were recognized as income in the consolidated income statement as of September 30, 2020 (see the Notes on the consolidated income statement). The number of employees subject to short time work has gradually decreased since the end of the lockdown. In addition, domestic and foreign subsidiaries utilized deferrals of social security contributions, non-wage costs, and taxes as of September 30, 2020, which are likely to be paid in full during the business year 2020/21. See the Notes on the consolidated statement of cash flows for further information.
Redundancy plans were put in place in connection with personnel reductions at the Group’s facilities in Kapfenberg and Kindberg (both Austria) as well as in a few German companies. For details, see the Notes on the consolidated statement of financial position.
Effects on Uncertainties in Accounting Estimates and Assumptions
The potential effects of the COVID-19 pandemic discussed in the Consolidated Financial Statements as of March 31, 2020, on uncertainties in accounting estimates and assumptions were repeatedly reviewed during the preparation of the present Interim Consolidated Financial Statements. They remain valid with the exception of the changes mentioned below.
- Impairment tests were conducted for all cash generating units and all units to which goodwill is allocated where an indication of impairment was identified. See the Note, Impairment losses and reversal of impairment losses.
- The aerospace segment’s customers did not encounter any financial difficulties up to the reporting date (September 30, 2020) despite the challenging environment. However, while aircraft manufacturers did postpone some of the orders previously placed, this did not affect any revenue previously recognized as per IFRS 15.
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