Economic downturn, which is gaining momentum in key markets since the beginning of the current fiscal year, along with extremely difficult conditions in the steel sector led to a decline in all categories of income of the Voestalpine group in the first six months of 2019 – 2020 financial year.
Revenue for the first six months of the fiscal year declined by 2% yoy, from 6.7 to 6.5 billion euros. The operating result (EBITDA) fell 23%, from 860 to 666 million euros. Profit from operating activities (EBIT) decreased by 52%, from 480 to 230 million euros. Profit before tax decreased by 61% from 422 to 163 million euros and the profit before tax by 64% - from 320 to 115 million euros.
Unfavorable conditions in the steel sector increased even more due to significant growth of prices for raw materials combined with falling sales prices and the high levels of steel imports into Europe, which only grow, said Voestalpine.
"given these negative macroeconomic changes scenario outlined at the beginning of the current fiscal year, no longer applied. From today's point of view, it is expected that the third fiscal quarter is likely to be in the same complex as the second quarter 2019/20 financial year, in terms of profit. Positive effects such as seasonal influences, and from the solution of internal problems, and the contribution to profit from steps taken to reduce costs and improve efficiency should be reflected in the last quarter of the financial year", - stated in the message of the company.
Voestalpine on Wednesday lowered its forecast for annual profit amid ongoing weak demand from the automotive sector and low steel prices, and now expects that underlying profit will fall by about 17%.
At the moment the management Board of Voestalpine expects that EBITDA will amount to about 1.3 billion euros in 2019 - 2020 financial year - assessment, which generally corresponds to market expectations.
