CMC Poland foresees continued uncertainty amid construction slowdown

CMC expects its Polish unit’s results in the fourth fiscal quarter through August to be unchanged from the May quarter, reflecting continued economic uncertainty. This comes after European end-user market conditions softened in the last quarter. Polish construction activity decelerated and industrial production across Central Europe remained muted.

CMC Poland’s steel shipments fell 10% on-year in the May quarter, not a bad result considering the high base created by the post-Ukraine invasion surge in buying last year. Merchant and other products deliveries fell 8% to 283,000t and rebar was down 14% to 146,000t, Kallanish notes.

Average selling price dropped 22% to $753/short ton. Cost of scrap utilised fell 19% to $427/st. This meant steel products margin plummeted 40% to $326/st, easily the lowest quarterly margin this fiscal year so far.

Net sales dropped 56% in the May quarter to $353.29 million and adjusted Ebitda was only $9.6m versus over $120m last year. The decline was driven by lower margins over scrap, higher energy costs, and reduced shipment volumes, US-based CMC says.

In the nine months through May, however, CMC Poland’s shipments rose 4% on-year to 1.34 million st, while net sales were down 8% to $1.12 billion and Ebitda down 69% to $87.1m.

Adam Smith Poland