German steelmaker Salzgitter posted record-high earnings over January-June amid robust steel prices despite marginally lower output over the period, the company said Aug. 11. This also enabled Salzgitter to approve the largest investment — on low CO2 steelmaking — during its time as a public company.
The company’s crude steel output fell 1.1% on the year to 3.34 million mt in January-June, but H1 revenue from the company’s external sales rose 50% to Eur6.6 billion ($6.8 billion) amid record rolled steel prices. EBITDA grew to Eur1.1 billion and Eur781 million after-tax profit increased 3.4 times.
“We are reporting by far the best operating result for a half-year in the history of Salzgitter. The company’s supervisory board has approved funds of more than Eur700 million for the first development stage of the SALCOS [Salzgitter low CO2 steelmaking] program, marking the largest investment since the company’s listing in 1998,” Salzgitter CEO Gunnar Groebler said in a statement.
The company expects to place the first contracts for the SALCOS plant with engineers in the July-September quarter and aims to deliver first volumes produced via this route to customers toward the end of 2025.
The complete transition of the integrated steelworks in Salzgitter to low-carbon crude steel production is to be completed by 2033.
Once this happens, Salzgitter will cut carbon emissions by 95%, or by around 8 million mt/year, approximately 1% of Germany’s carbon emissions, the company said.
It added that it was not untouched by the risks emerging from Russia’s invasion of Ukraine and was particularly concerned about a further escalation of the gas crisis that it triggered.
Salzgitter is currently producing over 80 km of line pipe that will connect the Wilhelmshaven and Brunsbüttel LNG terminals to Germany’s gas grid, said Salzgitter’s CFO Burkhard Becker.
Through this commissioning, Salzgitter is contributing to putting in place infrastructure needed for the society and the economy to function smoothly, according to Becker.
Salzgitter continues to anticipate Eur13 billion in sales and Eur1.4 billion-1.6 billion EBITDA for full year 2022, but this is based on the assumption of unrestricted natural gas supplies to maintain production.
— Ekaterina Bouckley