The construction brake hit Ferrum: its sales fell 46%

Ferrum’s semiannual balance, corresponding to the last six months of 2024, reveals the impact that the construction crisis had on the company. With a turnover that fell 45.8% in real terms, the company felt the brake of the activity and had to apply adjustment measures to maintain its financial balance.

In total, The income reached $ 47,663 million, well below the $ 87,885 million registered in the same period of 2023. The main cause of this fall was the lowest sales volume in the local market, where the demand for sanitary artifacts, bathtubs and furniture fell very strong.

Production numbers reflect this scenario: in six months, Ferrum manufactured 440,649 sanitary artifacts, a figure much lower than 894,059 units produced in the same period of the previous year. In the case of bathtubs, the production fell from 5,560 to just 1,697 units.

Something similar happened with sales. While in the domestic market, 637,043 sanitary artifacts were marketed, in 2023 just over 1.13 million had been soldwhich represents a decrease of 43.8%. The sale of bathtubs was reduced by half, from 12,603 ​​to 6,038 units, and bathrooms also suffered a decrease, from 10,094 to 7,310 units.

Exports, on the other hand, managed to stay relatively stable. The company sold 49,151 sanitary artifacts, just above 47,685 units exported in the previous semester. However, the situation was not the same in all items: in bathtubs, for example, foreign sales collapsed from 148 to only 25 units.

The truth is that despite this adverse context, Ferrum managed to close the semester with a positive result, although well below the profitability levels of the previous year. The gross gain was $ 17,845 million, with a profit margin of 37.4% on sales, when in 2023 this percentage had been 46.5%. Profitability reduction is explained by the weight of fixed costs, which, although partially compensated for improvements in efficiency and reduction in supplies and manufacturing expenses, could not avoid the deterioration of the margin.

Within this framework, as its balance is released, to deal with the crisis, the company implemented a strong adjustment in its expenses. Both administrative and commercial costs dropped 39.8%, adding in total $ 13,803.9 million. In addition, lThe company carried out more drastic measures, such as the stoppage of the production of health artifacts in its plant in Villa Rosa (Pilar) during the month of July and a restructuring of its employee squad, which implied operational costs for $ 3,699 million.

In the financial aspect, Ferrum also faced complications. Net financial results were negative at $ 1,215.3 million, although this figure was lower than $ 5,489 million registered in 2023. LThe company had to face a higher cost of short -term financing, although the reduction of interest rates and a lower devaluation of the weight helped moderate the impact.

On the other hand, the final result of the semester left a positive balance of $ 97.4 million, although with a minimum profitability of 0.2% on sales, far from 10.9% reached in the same period last year.

At the patrimonial level, The balance shows a total asset reduction by $ 4,514.4 million, while the liability decreased to $ 4,611.8 million, mainly due to the decline in commercial and bank debts. There was also a drop in the inventory stock and in the available cash.

Finally, with regard to perspectives, as they point out from the memory of its balance, the company is confident that a greater offer of mortgage loans and new investment incentives can reactivate the demand for their products. Meanwhile, The company promises to continue focused on improving its cost structure and increasing the efficiency of its operations, with the aim of sustaining its competitiveness in a market that still faces great challenges.