Brazil's Belgo Bekaert Arames (BBA), a JV between ArcelorMittal and N.V. Bekaert, has changed its forecast for 2015 due to the bearish expectations for both the Brazilian economy and the local steel sector.
Brazil’s largest wire steel producer is expecting no growth at its operations, as opposed to last year’s estimates, which said the company could grow between 5 and 7 percent this year.
“We’re expecting to repeat 2014’s [results],” the company’s CEO, Augusto Espeschit, told local media. Belgo’s revenue in 2014 was BRL 2.1 billion, while net profit reached BRL 206 million.
The company’s “less optimistic” forecast for the current year was mainly impacted by the weak demand experienced by two of its main market consumers, the automotive and the civil construction segments, Espeschit explained.
Other factors worrying the company’s shareholders include Brazil’s current political situation and economic situation. “Such instability generates some uncertainty among our investors,” the executive said.
About 80 percent of BBA’s sales are destined to the domestic market, where it has nine industrial plants in the states of Minas Gerais, Sao Paulo and Bahia.