The global logistics situation continued to be challenging during the third quarter of 2021. The availability of transportation and difficulties in arranging logistics by Neles or its customers has caused delays in Neles’ deliveries. In addition, delays have occurred due to a shortage of electronic components. These challenges are also expected to continue in the fourth quarter of 2021.
During 2021, Neles’ Brazilian supply center was temporarily closed due to Covid-19 cases. The supply center reopened more quickly than initially expected due to the attentive management of the situation. There were similar challenges in Neles’ Indian factories at the beginning of the second quarter, leading to temporary closures.
Neles has operations in several regions where the Covid-19 pandemic continues to cause disruptions. There continue to be risks of similar temporary closures of local Neles operations as those experienced earlier. Currently, all Neles factories are operational, and the Covid-19 situation is being followed closely by management, prioritizing the health and safety of Neles’ employees and partners.
In 2020, the Services and other MRO-driven businesses were negatively impacted by pandemic-related mobility restrictions and our customers’ tight cash management. Especially large maintenance shutdowns were postponed. The global situation in the Services and MRO-driven businesses has been improving clearly in 2021, but uncertainties and risks in certain regions are expected to continue.
Since the second quarter of 2020, Neles has taken proactive measures to ensure the safety of employees, control costs and preserve cash flow to protect the company’s financial position. The measures have included a variety of enforced safety procedures at manufacturing sites, remote working, travel restrictions, cuts to external spending across the organization, as well as cost-saving and optimization activities. Travel restrictions, cuts to external spending across the organization, as well as cost-saving and optimization activities have continued in 2021. Covid-19-related personnel cost-saving actions were mostly discontinued at the end of 2020.
Increased attention has also been paid to managing net working capital. There have been no material credit losses or order cancellations.