Voestalpine reports loss for H1, revises expectations for full year 

Tuesday, 10 November 2020 16:13:43 (GMT+3)   |   Istanbul
       

Austrian steelmaker Voestalpine AG has posted a net loss of €276 million for the first half ended September 30 of the financial year 2020-21, compared to a net profit of €115 million recorded in the first half of the previous financial year. In the first half of the financial year 2020-21, the revenues of the company amounted to almost €5.1 billion, down 21.9 percent year on year. In the given period, the company’s EBITDA was €395 million, decreasing by 40.6 percent year on year, against the backdrop of the coronavirus crisis.

The company stated that its first half results were shaped entirely by the coronavirus pandemic. While the first quarter was characterized by the massive meltdown in demand in almost all customer segments and regions, the second quarter saw a considerable rebound in major sectors. Particularly the European and the US automotive industry but also the consumer goods and construction industry quickly regained their momentum following the lockdown measures that had been imposed in the spring. Thanks to rising demand for high quality steel products, in September the company was able to restart its small blast furnace in Linz, Austria. In regional terms, the company’s plants in China returned to pre-crisis levels of production capacity utilization.

“The EBITDA and the increase in cash flow show that our consistent cost-cutting and efficiency enhancement programs have taken hold. At the same time, this performance reflects rebounding demand in major customer segments during the business year’s second quarter. But it remains to be seen despite positive market signals how the renewed lockdown measures in Europe will impact the economy,” Voestalpine AG chairman Herbert Eibensteiner said.

There has been a dramatic increase in the number of Covid-19 infections. Many EU member states have imposed lockdowns again. The impacts of these measures on economic growth are uncertain. The Voestalpine Group stated that it will continue to focus on cost management and earnings stabilization. At the same time, the company’s efforts to manage working capital will remain high and investments will remain low in order to strengthen the group’s cash flow as well as its asset and capital structure. Voestalpine expects to generate EBITDA of between €800 million and €1 billion in the business year 2020-21, compared to the previous forecast of €600 million.


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