Summary

Sound profit trend in the current financial year

The Salzgitter Group achieved a considerable increase in its profit in the third quarter of 2011 compared with the year-earlier period. Its presentable performance in the first nine months of 2011 was due first and foremost to the generally favorable economic environment for rolled steel and tubes products.

Group:

  • External sales: growth of 18 % to € 7,331.4 million
  • Earnings before tax: significant increase to € 169.1 million
  • Profit after tax: € 114.7 million
  • Earnings per share (basic): rise to € 2.06
  • Net credit balance: in excess of € 500 million and therefore exceptionally sound balance sheet and financial position
  • Equity ratio: stands at 43.9 %
  • ROCE: 5.8 %

Business performance of the divisions:

  • Steel: demand for most products remained brisk well into the third quarter; only from September onwards, reticent order patterns in a number of customer sectors and moderate alignment of flat steel production; increase in external sales due to higher selling prices for flat steel and plate; significant increase in earnings before tax as against the year-earlier figure
  • Trading: firm shipment volumes and selling price development in domestic business and ongoing positive trend in international trading; increase in external sales of around one quarter; very pleasing earnings before tax only marginally lower than previous year's result that was determinedby exceptionally high windfall effects
  • Tubes: healthy demand in most sub-segments; stable external sales; earnings before tax more than trebled; main contribution from precision and stainless steel tubes, both of which staged impressive turnarounds and delivered clearly positive results
  • Services: increase in external sales mainly attributable to higher scrap prices; year-earlier earnings before tax almost matched
  • Technology: external sales considerably higher than a year ago thanks to the recovery in KHS's project and service activities and the plastics-injection mold machinery business, notable improvement in the margins of orders recently acquired by KHS; however, settlement of projects originating in previous years exert considerable pressure on the result
  • Other/Consolidation: substantial increase in external sales; earnings before tax comprises a very pleasing after-tax contribution of € 52.9 million from the Aurubis AG participation
Forecast for the financial year 2011: The euro crisis has resulted in greater macroeconomic risks since the summer. Demand in many product segments is nonetheless comfortable, albeit at a more modest level. Taking account of new orders placed in recent weeks, which give rise to cautious optimism, we affirm our forecast for the Salzgitter Group's earnings before tax of around € 200 million in the financial year 2011.
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