Bekaert expects challenging times ahead

Belgian wire rod specialist Bekaert forecasts a competitive and challenging market across most of its divisions in the second half of 2023.

In its first half-year earnings report monitored by Kallanish, the company says it is facing a demanding business environment but will continue to focus and strengthen its core business.

For the remainder of the year, Bekaert sees further volume pressures, also considering the unfavourable seasonality. However, there are opportunities in North America for the steel wire division thanks to restocking and the release of federal funds in the utilities sector. Activity in Europe, Latin America and Asia will remain subdued.

In H1, the wire segment reported an on-year 13.4% decrease in sales due to lower volumes, wire rod price decreases and unfavourable currency movements. The firm recorded sales volume declines across most markets, particularly in the commodity segments.

While demand from the energy and utility sectors was strong in H1, especially in North America, market activity in EMEA was weak, apart from in the energy industry. Bekaert is giving “intense focus” to plant efficiency and cost control, it says.

The disposal of the company’s “Steel Wire Solutions” businesses in Chile and Peru will be completed by the end of 2023.

Group H1 sales were down 8.2% on-year to €2.3 billion ($2.5 billion) due to unfavourable currency movements, lower volumes and pricing, partly offset by a positive price-mix contribution. Ebitda also fell on-year, by 6.8% to €317 million.

The Steel Wire Solutions joint venture in Brazil also reported a revenue decline of 9.4% against H1 2022, caused by flat volumes coupled with price-mix effect.

Bekaert’s specialty division also reported a decrease in sales of 12.6% in H1 due to project postponements and volume declines, in line with broader construction market weakness, particularly in Europe.

Natalia Capra France