Salzgitter sees performance downturn in tricky first half

Salzgitter is currently going through a difficult spell, little helped by its relatively high profits in 2017 and 2018. However, “… we have seen worse and survived it,” its ceo Heinz Jörg Fuhrmann says in an interview with FAZ.

As with other European steel groups, Salzgitter saw all key figures fall in the first half of 2019, but maintained some profit in all of its operations, Kallanish notes. The order intake at the Strip Steel unit generated revenues that fell from €1.63 billion ($1.82 billion) to €1.57 billion, and a pre-tax profit that fell from €110 million to €60m. The lower performance compared with the outstanding earlier result is largely due to higher raw material prices and the downturn in the selling prices of strip steel products, the company says.

Volumes in the Plate/Section unit fell significantly below the level posted in H1 2018, due in particular to lower volumes. Orders in the segment dipped from 1.17 million tonnes to 1.04mt, and revenues from €954m to €887m. Salzgitter notes that a higher pre-tax profit from its sections activities at Peiner Träger compensated for a negative result of the heavy plate mills, and came to €0.6m, after €22m a year earlier.

At Mannesmann tubes unit, shipments remained virtually unchanged, while external revenue rose on the back of selling prices from €563m to €582m. Pre-tax profit was €9m, after €12m in H1 2018.

In the Trading unit, shipments dropped from 2.25mt to 2.09mt due to the downturn in international trading volumes, whereas sales by the stockholding segment remained stable. External revenues settled around the previous year’s level at €1.58 billion, and generated a pre-tax profit of €4m, which is notably lower than the €25m achieved in the corresponding period in 2018.