Lower prices, higher costs hit Stalprofil earnings

Stalprofil posted a 30% on-year reduction in standalone first-quarter revenue to PLN 232.6 million ($55.9m), while net profit slumped 89% to PLN 4.05m. Lower steel prices seen since towards the end of 2022 continued in Q1, resulting in single-digit distributors’ margins, the firm says in its preliminary figures.

Moreover, earnings were impacted by higher operating costs versus last year, including labour, energy and logistics costs, coupled with significantly weaker demand than in Q1 2022. The low level of government investment at national and local level is also resulting in reduced demand from the construction sector, Stalprofil observes.

In full-year 2022 the firm saw steel product sales rise 6.5% on-year to 221,136 tonnes, whereas, in the infrastructure segment, pipe anti-corrosion coating sales surged 20.5% to 1.64 million m2. Consolidated revenue surged 34% to PLN 2.22 billion, of which 10.2% was from exports.

Fellow Polish distributor Bowim also reported 9% and 95% on-year drops respectively in Q1 revenue and net profit, citing the downward price correction seen since May 2022 resulting from war in Ukraine, high energy costs, high inflation and interest rate hikes (see Kallanish passim).

Adam Smith Poland