Summary

Half-yearly result burdened by structural crisis in the European steel industry - "Salzgitter AG 2015" generates profit potential of € 200 million p.a.

In the first half of 2013, the performance of the Salzgitter Group was largely determined by the structural crisis in the European steel industry. Severe competition resulting from the ongoing capacity underutilization of numerous producers in southern Europe pushed the selling prices achievable for most rolled steel products below the manufacturing costs. The sectional steel products processed by the construction industry were the hardest hit. Against this backdrop, the Steel Division reported a high loss owing primarily to impairment of the assets of Peiner Träger GmbH (PTG). This impairment had become necessary due to the persistently unsatisfactory earnings outlook of the section business. Additional profit burdens emanated from the dramatic lack of orders in the Tubes Division's large-diameter pipes business.

  • External sales: External sales: down by 7 % to € 4,977.3 million
  • Earnings before taxes: € –298.7 million; comprises € 185.0 million in impairment of PTG's assets as well as € 54.2 million in negative after-tax contribution by the 25% holding in Aurubis AG, a participation included at equity
  • After-tax result: € –315.2 million
  • Earnings per share (basic): € –5.87
  • Net credit balance: € 375 million
  • Equity ratio: 38.6 %

Business development of the divisions:

  • Steel: companies exposed to fierce competitive pressure, external sales below previous-year figure due to weak selling prices, pre-tax loss of € 260.5 million includes impairment of PTG's assets amounting to € 185.0 million
  • Trading: shipments stable, bolstered by very good volumes of international trading, external sales down 15 % due to lower price level, presentable earnings before tax of € 19.6 million
  • Tubes: shipments slightly lower year on year, higher large-diameter pipes volumes unable to compensate for the lower shipments of precision and HFI-welded pipes, external sales somewhat higher against year-earlier figure, negative pre-tax result first and foremost attributable to unsatisfactory order and capacity utilization situation of European large-diameter pipe mills
  • Services: external sales and pre-tax result fall short of prior-year figures, in particular due to the lower level of service provider activities for steel production
  • Technology: "Fit4Future“ restructuring program generates sustainable effects, increase in external sales, pre-tax result double compared with prior year period
  • Other/Consolidation: negative pre-tax result includes € –54.2 million in after-tax result from Aurubis AG, an investment included at equity

Guidance: Negative influences on the result in the accounts of the first half of 2013 and the development of operations anticipated necessitated an adjustment of guidance for the results. With regard to the 2013 financial year, the Salzgitter Group now anticipates sales slightly lower in a year-on-year comparison and a negative pre-tax result of around € 400 million. As already announced, the implementation of the "Salzgitter AG 2015" Group project may still incur special, initially burdening, nonrecurrent effects.