Voestalpine posts increased sales revenues in Q2 FY 2010-11

In the first quarter of FY 2010-2011, which ended on June 30, Austrian steelmaker Voestalpine AG increased its sales revenues by 22.1 percent year on year and by 13.02 percent quarter on quarter to €2.56 billion, due to a steep rise in sales volumes in all its divisions. Owing to further improved price levels and to its ongoing efficiency improvement programs, Voestalpine registered a profit of €121.1 million in the quarter in question, compared to a loss of €48.2 million in the year-ago period.
 
The economic trend during the first three months of the 2010-11 business year showed a continuing recovery in demand in almost all of Voestalpine's major markets and across all industries. For example, the European automobile industry reported growth of unit production figures that was well into double digits, driven primarily by demand from the Asian markets, with China at the forefront. In the important customer segments of energy, mechanical engineering, plant construction, commercial vehicles and white goods, there was a marked rise in demand. Additionally, the shift in the euro-US dollar exchange rate resulted in a particular improvement of the global competitive position of suppliers from the euro zone. Only the construction industry was still weak, where investments fell during the financial crisis and where the effects of government cost-cutting programs are now making themselves felt.
 
Commenting on the results, Voestalpine CEO Dr. Wolfgang Eder said, "Despite continuing doubts regarding a comprehensive global recovery, since early 2010 the industrial environment in most economic regions has been characterized by an unexpected momentum. From today's perspective, we can assume that the operating result of the business year 2010-11 will substantially exceed that of the previous year, aided by the efficiency improvement programs currently being implemented."
 
However, the investments of Voestalpine in the first quarter of FY 2010-11 came to €80 million. As compared to the already significantly reduced investments during the first three months of the previous business year (€140.2 million) due to the economic crisis, this sum indicates an additional decrease of €60.2 million or 42.9 percent. This means that the investment expenditures of all the divisions and of the group as a whole continue to be substantially lower than the level of depreciation (€147.6 million).