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Salzgitter reports strong results for 2018

Steel News - Published on Wed, 06 Feb 2019

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The Salzgitter Group released the preliminary figures of the financial year 2018 along with the sales and profit forecast for the financial year 2019. According to the still preliminary figures now available, the Salzgitter Group generated a pre-tax profit of EUR 347.3 million in the financial year 2018 (2017: EUR 238.0 million), marking the fifth earnings increase in a row and the best pre-tax result in the last ten years. Along with the performance of the Strip Steel Business Unit, the gratifying contributions first and foremost by the Trading, Technology, and Plate / Section Steel business units, as well as approximately EUR 150 million (FY 2017: EUR 97 million) in additional earnings improvement potential realized for the first time from the Group’s profit improvement programs contributed to this development. The result includes a netted EUR -63.4 million burden on earnings from special effects (FY 2017: EUR -82.9 million), among others as precautionary measure a provision pertaining to the known and ongoing investigation of the German Federal Cartel Office against plate and strip steel producers as well as adjustments to fixed asssets of Mannesmann Precision Tubes Group.

In view of the gloomier sentiment and numerous economic and political uncertainties, we anticipate the following for the Salzgitter Group in the financial year 2019:
• a slight increase in sales to above the EUR 9.5 billion mark (FY 2018: EUR 9.3 billion),
• a pre-tax profit of between EUR 125 million and EUR 175 million (2018: EUR 347 million) and
• a return on capital employed (ROCE) that is notably lower than the previous year’s figure (FY 2018: 10.4%).

The EBT range we predict therefore moves within a corridor below the average of the current market expectations. Against this backdrop and the generally still challenging environment, the programs of measures successfully implemented since 2013 are to be continued in an updated form.

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Posted By : Ratan Singh on Wed, 06 Feb 2019
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