Klöckner & Co expects steel demand to recover sequentially as the year progresses and is now forecasting a slight increase in shipments for 2023.
The German distribution group suffered from a significant steel price correction during the second quarter, chief executive Guido Kerkhoff said during a conference call monitored by Kallanish. Due to the resulting lower average sales price compared with the same period of the prior-year, the company forecasts a significant decline in revenue for 2023.
Klöckner generated sales of €4 billion ($4.4 billion) in the first half of 2023, down from €5 billion in H1 2022. Operating income (Ebitda) before material special effects in the reporting period amounted to €131 million, down from €423m last year. The net result was a modest profit of €4m versus €323m a year earlier.
At the conference, Kerkhoff forecasted a “considerable increase” in shipments and revenue to already occur in Q3 versus Q2. He therefore sports more optimism than many other observers from the distributors sector, who do not believe in a post-summer recovery this year.
One of Klöckner’s advantages is its strong business in the USA and Mexico, where the economy is more promising than in Europe (see separate story).
Last year, its total volume of shipments dropped by 4% on-year to 4.7 million tonnes, owing to a disciplined margin-over-volume strategy. Revenue came to €9.4 billion, up 26% on 2021, and is now expected to fall this year due to weakening prices.
Christian Koehl Germany