Swiss Steel reports 2023 loss on weak markets

The performance of Swiss Steel in 2023 was impacted by very weak market demand. Revenues fell by 20% year-on-year to €3.24 billion ($3.52 billion).

Revenues decreased across all major geographical markets, Kallanish hears from the maker of special bar. The revenue generated in its main market, Germany, which accounts for around one third, decreased by 22% to €1.10 billion. In addition, customers destocked their inventories, and increased imports further exacerbated demand weakness, the group notes. Required minimum plant utilisation was not sustained at all major production sites

This led to a decline in sales volume of 17% to 1.375 million tonnes, while the fall in the average sales price of SBQ steels was relatively mild, at -3%, to €2,363/t. The group notes that input prices for scrap sort 2/8, which is particularly important for its production, were down 18% from 2022.

The Engineering Steel Division, Swiss Steel’s largest division in terms of sales volume (75%), was particularly affected by the weak demand from automotive production and the contractions in the mechanical and plant engineering sectors. The sales volume here was down 17.5 % y-o-y at 1.03m tonnes. Stainless steels made 17%, or 239,000t, of the company’s sales, and tool steels 8%, or 104,000t.

In addition, the performance was impacted by multiple one-time effects. This included significantly decreasing spot prices for electricity and gas in combination with declining raw material prices resulting in significant inventory valuation losses. Extraordinary costs were also caused by layoffs, with the headcount reduced by 11% to 8,812 staff, including 251 employees from the divestment of Eastern European sales and distribution entities.

The adjusted Ebitda fell from €217m to a loss of €41m tonnes, the net loss came to €295m, following a net profit of €9m in 2022.

Christian Koehl Germany