Vitkovice Steel returns to profit after several years

Vitkovice Steel has bounced back into profit after several loss-making years, posting a CZK 25 million ($1.1m) net profit in the nine months through September. This was supported by strong steel demand and production efficiency improvement. The firm says the outlook is also positive despite rising utility prices.

Last year Vitkovice posted a CZK 267m loss. This was still better than previous years. The previous time the firm posted annual profit was in 2017 but this was due purely to high exchange rate profit from revaluation of shareholder loans. Before that, the firm last registered profit in 2008.

“The circumstances faced by steelmaking are still full of risks, from the EU climate package up to the growth of prices of utilities and emission credits, but the strong revival of demand for steel products plays into our hands,” Vitkovice Steel general manager and chairman Dmitrij Scuka says in a note seen by Kallanish. “Now we are doing our utmost to improve the favourable conditions in order to strengthen our position of a leading steel plate producer.”

Efficiency has been improved by modernising procurement logistics, streamlining production planning, and introducing a new software for rolling, the Czech steelmaker says.

Vitkovice Steel chief financial officer Radek Strouhal says: “We believe that the market conditions will continue to be positive for steelmakers. Steel, as a 100% recyclable material, should play a leading role in the economic and environmental approach to the development of society.”

Vitkovice has a 755,000 tonnes/year capacity plate mill and seldom-used 170,000 t/y heavy sections mill. The firm switched to sourcing merchant slab when it shut down its 950,000 t/y electric arc furnace-based meltshop in 2015.

Adam Smith Germany