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