Following the profit warning it issued about a week ago, Germany’s Klöckner & Co expects negative impacts from a fall in demand for the remainder of 2019.
In the second quarter of the year, revenue dropped by -6% to € 1.68 billion ($1.87 billion) from the second quarter of 2018, on volume sales of 1.48 million tonnes, down -8% year-on-year. From Q1 to Q2, shipments and revenues remained relatively unchanged. Net income was €28 million, compared with €33m in the prior-year quarter. The company cites a negative volume and price effect of in total €69m, mainly due to y-o-y negative windfall effects in the US, weaker automotive business and weaker market sentiment in Germany.
Looking forward, it expects demand to stall mainly in the European automotive and mechanical engineering sectors. While the negative price effects in the USA are likely to be greater than originally expected, ceo Gisbert Rühl does not exclude a stabilisation of prices, he said during a conference call. There could even be a slight rise in prices, he continued.
“The outlook is clearly bleaker, and we cannot expect a growth of more than 1%, neither in the USA or in Europe,” he added during the call monitored by Kallanish. While car production in Europe has surrendered some 12% in Europe, one sector that still does well on both sides of the Atlantic is ship-building, he noted.
