Stalprofil reduces profit, cautions over withheld EU funds

Stalprofil’s revenue surged 56% on-year in the third quarter to PLN 575.95 million ($129.4m) but net profit slumped 41% to PLN 15.77m due to higher costs, Kallanish notes.

Steel product sales volumes rose 9.4% in Q3, the firm says without providing tonnages, with sales value up 24%. In the transmission infrastructure (pipeline) segment, which includes pipe coater subsidiary Izostal, revenue soared 121% thanks to sales to Polish pipeline operator Gaz-System, which were almost zero a year earlier.

Steel demand tapered off and supply increased in Q3, leading to a continuation of the pricing downtrend seen since Q2. Mills responded to this and rising energy costs by limiting production, which helped balance supply with demand, and stabilise prices at pre-Ukraine war levels, Stalprofil says.

The withholding by the EU of Recovery and Resilience Facility (RRF) funds for Poland creates significant uncertainty for Poland’s economy amid the onset of difficult times, Stalprofil says. Those funds were supposed to be allocated to infrastructure investments, meaning their blocking may result in a notable fall in investments.

In the nine months through September, consolidated revenue surged 54% on-year to PLN 1.76 billion but net profit fell 6% to PLN 87.74m.

Adam Smith Poland