Salzgitter’s Tube and Trading units remain profitable

The order intake at Salzgitter AG’s tube unit, Mannesmann, at €342 million ($382m), was noticeably below the previous year’s figure of €382m in the first quarter of 2019, the company says.

The drop was attributable, on the one hand, to the downturn in the medium-diameter line pipe segment. Although inquiries in the international project business remained at a normal level, large volumes were not awarded especially on the American market, the company says. On the other hand, orders in the precision tubes group’s automotive customer and industry sectors declined, Kallanish notes.

While the business unit’s shipments rose, from 134,000 tonnes to 147,000t, orders on hand fell noticeably in a year-on-year comparison from €540m to €477m. Revenue growth was strong however, rising from €400m to €477m. With earnings before taxes of € 8.4m (Q1 2018: € 1.6m), the result significantly outperformed the year-earlier figure.

Looking forward, In the Mannesmann Business Unit will be affected by unsatisfactory capacity utilisation, at least through to Q3 2019. In contrast, the American Europipe companies are set to benefit from earlier order intake, and similar to Mannesmann Grossrohr GmbH, anticipate further bookings. After two very good years, the medium-diameter line pipe segment expects demand to settle at a normal level.

The Trading unit, which encompasses stockholding distribution as well as trading, lifted sales from €775m to €814m on the back of improved selling prices. Shipments by the unit fell from 1.123 million tonnes to 1.04mt. While the tonnage of the stockholding business increased, the volumes in international trading declined, due to protectionist measures and fierce competition, the company says. Looking ahead, the unit is assuming stable shipments and price-induced sales growth but lower margins due to price pressures, it reveals.