Mineral resources sector optimistic about activity recovery

The preservative of liquidity evolution is more optimistic compared to April, although 33% estimate a negative impact of 20% to 40% on liquidity.

José Manuel Ribeiro / Reuters

About 95 5% of companies in the mineral resources sector maintained their activity during the quarantine decreed due to the Covid-19 pandemic

According to a study conducted by the association Assimagra, the preservative of liquidity evolution is more optimistic compared to April, although 33% estimate a negative impact of 20% to 40% on liquidity.

The report sent to Jornal Económico informs that the interviewed entrepreneurs were more optimistic about the forecast of the turnover evolution in three months, with one in four (24%) estimating an increase or maintenance compared to the previous period. Despite this, 38% expect a reduction between 20% and 40% compared to the month of January.

The companies were also more optimistic about the forecast of the evolution of liquidity / receipts, compared to January 31, with one in three expecting a maintenance or increase, while 24% expects a reduction of more than 40% in the next three months. This percentage is, however, lower than that recorded in April (24% and 35%, respectively). Despite this, at six months the liquidity forecast is slightly more pessimistic with 38% of respondents estimating a 20 to 40% reduction in their treasury.

During the period under review, 38% of the companies resorted to bank financing and about 14% still consider doing so, although the majority have not applied for any support or are considering this hypothesis.

Of those who resorted to support, 88% opted to apply for credit lines under Covid-19 and only 13% for other existing lines. Half of the surveyed companies reported that the value of the credit was between 250 thousand and 500 thousand euros, with only 13% resorting to amounts greater than 500 thousand euros and less than 1 million. Of the orders placed by companies so far, 78% have already been approved.

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