WEG sees growth opportunities in Biden infrastructure plan

The infrastructure plan of the President of the United States, Joe Biden, should bring growth opportunities for WEG in the coming years, the company’s management said on Thursday.

When questioned, André Salgueiro, Investor Relations Manager, said that the package would be favorable, considering the focus on renewable generation – one of WEG’s areas of activity in the country. He says that the plan should boost investments by the American industries in general, which should affect sales.

The company focuses its exports on electric motors and generators after importing the necessary materials to produce these goods. Imports are focused mainly on diodes, transistors and semi-conductors.

Exports by WEG | Jan to Dec 2020 | TEU

Imports by WEG | Jan to Dec 2020 | TEU

At another point in the conference call, analysts questioned WEG about how rising input prices, especially metal, could impact the company’s margin.

According to Salgueiro, inflation may affect the results. Still, the effect will take a while to appear considering the protection mechanisms adopted by the company, such as hedging commodity prices and advance purchases of raw materials.

WEG management also said that the prospects for the second quarter of 2021 are positive, considering the weaker basis of comparison, but that the second half of the year should present challenges.

André Rodrigues, Administrative, Financial, and Investor Relations Director, recalled that the company still faces atypical market situations because of the pandemic. According to him, even with the recovery of demand seen in the last quarters, it is still difficult to predict whether this will continue until the end of the year.

Questioned by an analyst about the order book, Rodrigues again spoke about the prospects for the second half of the year, stating that the resumption of wind-generation projects should boost results.

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