Salzgitter expects crisis to bottom in third quarter

Salzgitter suffered a pre-tax loss in the first half of 2020, which however turned out less harsh than expected, Kallanish learns from the steelmaker.

Once the impact of Covid-19 kicked in, capacity utilisation across the group’s different subsidiaries in the second quarter was between -10% and -70% lower than in Q2 2019. Salzgitter did not provide details of utilisation by plant.

The group closed the first half with a pre-tax loss of €128 million ($146m), thereby exceeding the capital market’s expectations of a loss of €151m, it notes. External sales decreased to €3.6 billion from €4.5 billion in the first half of 2019, due to lower volumes and lower prices.

“We anticipate that the second and third quarters will likely mark the bottoming out of the current crisis,” Salzgitter executives say. At the same time, they emphasise great uncertainty about a recovery in the second half. “In this volatile environment, the development cannot be predicted in the customary manner,” they add.