Steel distribution group Klöckner & Co has made a strong start to 2021 with its best quarterly earnings in over 12 years.
As a result of an exceptionally strong positive price trend, sales increased despite a pandemic-driven fall in shipments, rising by 5.3% on-year in the first quarter to €1.5 billion ($1.8 billion). The operating income (Ebitda) of €130 million – versus €21m last year – before material special effects was at the upper end of the guidance range, which had been given at €110-130m.
Klöckner sees the overall economic situation and demand for steel increasingly recovering, which is why it forecasts an Ebitda range of €130-160m for the second quarter. At a press conference call, outgoing chief executive Gisbert Rühl said he expects steel prices to continue their journey upwards, but at a slower pace than in the preceding weeks. He added that the surge of recent months and weeks turned out even stronger in the USA than in Europe. The group has a strong representation in both regions.
Regarding lead times from mills, he told Kallanish that the fourth quarter is now the period for deliveries from current orders to arrive. “This is certainly unusually long,” he noted. Rühl added that Klöckner & Co, thanks to its operating strategy of “smart working capital”, has in recent months suffered only slightly from supply shortages. “We did not deplete our inventories towards year-end as many do, because we expected a time of shortage coming, so we maintained our delivery capability,” he said.
Christian Koehl Germany