Duisburg, Germany-based steel and metal distribution company, Klöckner & Co., has reported a net loss of €16 million for the first quarter of the current year, compared to the net loss of €12 million in the corresponding quarter of the previous year. The company said its guidance for EBITDA of €200 million in 2013 is looking increasingly unrealistic since it currently sees no signs of what was originally a widely anticipated pick-up in steel demand in the second half of the year.
In the given quarter, Klöckner's sales revenue decreased by 16.5 percent year on year to €1.62 billion. The company stated that the business volume in the Europe segment was down 15.8 percent year on year due to the ongoing difficult economic environment, the long winter, the effects of portfolio streamlining and comparably less working days, while the business volume in the Americas segment declined by 4.8 percent year on year. The decline in turnover in the US at 3.5 percent was nevertheless smaller than that across the market as a whole, which contracted by 6.6 percent due to ongoing uncertainties caused by fiscal and budget problems.
In light of the further sharp decline in European steel demand and the uncertain outlook, Klöckner has substantially expanded its restructuring program launched in September 2011, focusing on closing unprofitable sites and discontinuing low margin business activities, besides cutting administration and sales overheads. Since September 2011, the program has already led to the closure, or in eastern Europe the sale, of 50 locations and a reduction in the workforce by some 1,600. The measures still to be implemented in the company's French operations will be completed in the second quarter once the legal requirements are in place.
For the second quarter of the year, Klöckner expects a slight upturn in demand compared to the previous quarter, based primarily on the seasonal improvement in weather conditions and less on a general recovery in underlying demand. The latter will remain largely absent due to increased economic worries in Europe in the spring as well as unresolved fiscal and budget problems in the US.