Belgian wire solution specialist Bekaert expects typical seasonal patterns in the second half of 2024, especially in Europe. However, there is optimism for an increase in demand in Latin America, the company states in its earnings report obtained by Kallanish.
The firm anticipates significant year-on-year margin improvement and cash flow generation for the entire year. Although in the first half of the year sales decreased due to reduced volumes and lower input costs, the Steel Wire Solutions division has continued its strategic transformation and has substantially enhanced its profitability by implementing cost-saving measures. In comparison to the first half of 2023, consolidated third-party sales fell 9.5% due to 4.2% reduced volumes due to product portfolio rationalisation, and the combined impact of lower wire rod prices and pricing mix.
Bekaert’s specialty businesses expect continued volume growth in H2. The segment should capitalise on robust infrastructure investments in India and North America, including flooring for battery facilities, and data centres and underground applications. This adds to a robust projects pipeline in the Middle East and Australia, which includes projects for port pavements and tunnels. In the hydrogen business, Bekaert anticipate weaker demand growth than was initially anticipated, in line with industry delays. The company says it will be able to secure additional substantial long-term supply agreements that will serve as a foundation for future development.
Operational challenges in Europe and North America resulted in a decrease in sales for the Bridon-Bekaert Ropes Group (BBRG) division. The decline was primarily due to lower volumes. The steel ropes business encountered production output challenges in Europe and North America as a result of the delayed commissioning of equipment that was relocated from other facilities in Canada and Germany, as well as recurring staffing challenges. Minor sales decreases were observed in other regions for steel ropes. The BBRG division suffered an on-year 13.8% sales decline driven by lower volumes.
In the first half of 2024 Bekaert posted a year-on-year 11.1% consolidated sales decline to €2.1 billion ($2.2 billion) caused by lower volumes, lower raw material costs, and a negative impact from exchange rate movements. EBITDA stood at €288 million reflecting a 9.1% decline versus H1 2023.
Natalia Capra France
