Bekaert sees market remaining challenging amid slow demand

Belgian wire rod maker Bekaert sees the challenging market conditions persisting in most regions into the first quarter of 2024. To weather the slow demand, the group intends to focus on margin growth and cash flow generation., as well as growth opportunities, the firm says in its nine-month earnings report obtained by Kallanish.

In January-September, Bekaert registered a difficult environment in several of its end markets as “uncertainty remains for the financial year 2023”, it says.

Sales decreased by 13% year-on-year to €3.3 billion ($3.6 billion) due to lower prices and volumes, reflecting lower raw material costs and high inflation. For the full year, Bekaert anticipates €4.3 billion in revenue.

“The phasing out of previous wire rod price increases and energy surcharges reduced revenues by approximately €350 million and the lower overall volumes reduced revenues by approximately €180 million in the first nine months,” the report says.

The Steel Wire Solutions segment posted revenue of €912m in the first three quarters of 2023. This represented a 17% decline versus the same period last year due to lower sales prices, negative currency effects, and slow demand in Europe and Latin America, particularly from markets such as construction and agriculture. As demand from the energy and utility markets is proving resilient, Bekaert forecasts some demand growth from this sector in the coming months.

The Specialty division’s revenue also saw a 15% decrease y-o-y to €512m, driven by slower demand, currency impact, lower selling prices and the construction market crisis in Europe.

The disposal of Steel Wire Solutions’ businesses in Chile and Peru is now completed, the company concludes.

Natalia Capra France