Latest update to short-term risks and uncertainties
COVID-19-pandemian ja siitä seuranneen vuoden 2020 talouden hidastumisen vaikutukset Kemiraan olivat rajallisia. Kemianteollisuus ja asiakkaidemme toimialat luokiteltiin lähes poikkeuksetta yhteiskunnalle keskeisiksi toimialoiksi useissa maissa, joissa hallitukset asettivat rajoituksia taloudelliselle toiminnalle. Tämän vuoksi rajoitukset eivät koskeneet näitä toimialoja.
The COVID-19 pandemic and the related economic slowdown in 2020 had a limited impact on Kemira’s operations. In several countries with government-imposed restrictions on economic activity, the chemical industry and Kemira’s customer industries were almost always classified as essential industries and, as a consequence, were exempt from government lockdown restrictions.
The global economy has rebounded strongly from the COVID-19-related economic shutdowns. This has resulted in significantly higher raw material costs as well as significant supply chain and logistics disruptions, which, together with some shortages in raw material availability, has impacted Kemira during 2021. However, Kemira’s manufacturing facilities operated without significant disruptions despite supply
chain bottlenecks. Higher raw material costs and supply chain bottlenecks may impact Kemira negatively also in the coming quarters, particularly in Q4 2021.
The impact of COVID-19 on customer demand has varied by segment. During Q3 2021, Kemira’s end market demand continued to grow strongly compared to the low comparison period, which was impacted by the COVID-19 pandemic. In Pulp & Paper, demand for chemicals improved in pulp, board and tissue, while demand for printing and writing chemicals continued to show signs of stabilization in Q3 2021. In Industry & Water, demand in both municipal water and industrial water treatment grew. In Oil & Gas, shale market activity continued to recover sequentially. Demand grew strongly compared to Q3 2020. Also oil sands tailings treatment market grew.
New COVID-19 variants could deteriorate the pandemic situation and result in additional restrictions on economic activity, which in turn could lead to lower demand also in Kemira’s end markets. However, this is not a base case expectation as vaccines are being rolled out more broadly globally, albeit with large variations between regions and countries.
For Kemira’s 2021 outlook, including assumptions behind the outlook, please refer to January-September 2021 Interim Report “Outlook” on page 19.
Kemira has set up regional crisis management teams to monitor the COVID-19 situation regionally, as the development of the COVID-19 pandemic varies by region. The aim of the crisis management teams is to mitigate the impact on Kemira in order to ensure our and our customers’ business continuity. Regional crisis management teams continued to convene regularly in Q2 2021. Business travel remains restricted, and Kemira has taken several steps to ensure employee safety at its locations. To mitigate the impact on its supply chain, Kemira reviews alternative suppliers on a continuous basis to ensure smooth operations in all circumstances.
Kemira has regional crisis management teams to monitor the COVID-19 situation regionally, as the development of the COVID-19 pandemic varies by region. The aim of the crisis management teams is to mitigate the impact on Kemira in order to ensure our own and our customers’ business continuity. Regional crisis management teams continued to convene regularly in Q3 2021. Business travel remains limited, and
Kemira has taken several steps to ensure employee safety at its locations. To mitigate the impact on its supply chain, Kemira reviews alternative suppliers on a continuous basis to ensure smooth operations in all circumstances.
The majority of Kemira’s employees who are able to do so have worked remotely since March 2020. Kemira has supported leaders and employees in the adoption of remote working during the COVID-19 pandemic and remote work has been smooth. Kemira has started a gradual and safe return to offices and towards a hybrid-working model, while also complying with possible social distancing measures and local government recommendations.
In Q3 2021, Kemira has assessed the impact of the uncertainty caused by the COVID-19 pandemic on its financial position and considered the values of assets and liabilities that contain significant accounting estimates that require judgment or that may have been particularly affected by the COVID-19 pandemic. Based on the analysis, no indications of impairments in asset values were identified during the period
e.g.risk of goodwill impairment or credit loss of trade receivables. However, current situation in energy market has been reflected into energy price forecasts used in the valuation of Pohjolan Voima Group shares, increasing the share values by EUR 31.7 million from the year end 2020.
At the end of September 2021 Kemira had ample liquidity and a EUR 400 million undrawn committed credit facility maturing in 2026. Kemira issued a EUR 200 million, 7-year-bond in March 2021 and has no imminent financing needs.