Reliance Worldwide Corporation (ASX:RWC) to scale back Australian operations

Industrials heavyweight Reliance Worldwide Corporation (ASX:RWC) has announced that due to the impact of covid-19 the board has decided to scale back manufacturing operations in Australia from 5 days a week to 4 days a week, commencing the week of 11 May 2020.

While to date there has been no significant deterioration in demand in Australia, economic forecasts are indicating that new housing construction in Australia is likely to decline over the next year, and as such Reliance has decided to pre-emptively cut output to meet the future demand downgrade.

This comes after the company announced that over 40 per cent of its UK workforce had been placed on furlough (leave of absence). The company says that aggregate demand in Europe, the Middle East and Africa is currently running at 35 to 40 per cent of pre COVID-19 levels with most of its UK channel partners still operating on a restricted and limited service basis.

The company’s manufacturing operations in North America remain unaffected at present. Sales in the US continue to track broadly in line with expectations, however, sales in Canada have been impacted by restrictions on activity in some provinces.

Shares in Reliance Worldwide Corporation (ASX:RWC) are trading 2.2 per cent lower at $2.67
 
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Source: Finance News Network