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EANS-News: SALZGITTER AG - First Quarter of 2010 Salzgitter Group delivers an operating profit in the first quarter of 2010

Salzgitter (euro adhoc) -

  Corporate news transmitted by euro adhoc. The issuer/originator is solely
  responsible for the content of this announcement.
quarterly report
In the first quarter of the financial year
2010, the ongoing economic recovery supported both the current order 
and capacity utilization situation as well as the further business 
outlook of the Salzgitter Group. The selling price trend for rolled 
steel and tubes products, however, failed to keep pace with the swift
increase in the price of commodities. Moreover, the sale of products 
destined for the construction sector was hampered by the protracted 
wintry weather conditions. Given these generally favorable 
conditions, which were not without their limitations, the Group 
achieved an operating profit, thereby concluding the first quarter 
with a result much improved in comparison with a year ago.
The only slow recovery in selling prices in the Steel, Trading and 
Tubes divisions seen in the first months of 2010 from their lowest 
levels in the previous year resulted in Group external sales of EUR 
1,924.8 million, which is still below the year-earlier figure (first 
quarter of 2009: EUR 2,194.7). The Salzgitter Group closed the first 
quarter with an operating pre-tax profit of EUR 2.6 million. This 
figure factors in accounting-related measures of EUR 27.7 million for
project orders which have been booked and where the costs are no 
longer likely to be covered due to soaring commodity prices. The 
Group´s pre-tax loss of EUR -17.1 million (first quarter of 2009: EUR
-98.3 million) includes EUR 19.7 million worth of provisions formed 
for streamlining measures. The after-tax loss stood at EUR -13.3 
million (first quarter 2009: EUR -74.1 million), bringing earnings 
per share to EUR -0.27. Return on capital employed (ROCE) was still 
marginally negative (-1.0 %; first quarter of 2009: -7.7 %).
External sales by Division (EUR million):
Q1/2010  (Q1/2010)
Steel                                  516.1    (427.7)
Trading                                657.7    (926.9)
Tubes                                  449.4    (552.0)
Services                                88.0     (83.4)
Technology                             199.8    (192.5)
Others                                  13.8     (12.1)
Group                                1,924.8  (2.194.7)
Earnings before tax by Division (EUR million EBT):
Q1 2010  (Q1/2009)
Steel                                  -31.0   (-129.7)
Trading                                  4.0    (-20.6)
Tubes                                    2.6     (50.8)
Services                                 5.1     (-3.2)
Technology                             -13.3    (-23.3)
Others                                  15.5     (27.7)
Group                                  -17.1    (-98.3)
The immense and rapid fluctuations in the cost and price of 
commodities have reduced planning certainty to a minimum. 
Irrespective of the sustained global recovery in the steel markets, a
reliably quantified outlook for sales and the results of the 
Salzgitter Group cannot therefore be given for the financial year 
2010. In consideration of the currently discernible risks and 
potential, we nonetheless believe that achieving near breakeven may 
be possible in the current financial year.
As in recent years, we make special and explicit reference this time 
to the fact that opportunities and risks from currently unforeseeable
trends in selling prices, input materials and capacity level 
developments, as well as changes in the currency parity, may 
considerably affect performance in the course of the financial year 
2010. The resulting fluctuation in the consolidated pre-tax result 
may, as current events show, be within a considerable range, either 
to the positive or to the negative. The dimensions of this range 
become clear if one considers that, with around 6 million tons of 
steel products left to be sold this year by the Steel, Trading and 
Tubes divisions, an average EUR 30 deviation in the margin per ton is
sufficient to cause a variation in the annual result of more than EUR
180 million.
More information can be found in the full press release and interim 
report published today (please refer to: www.salzgitter-ag.de).
end of announcement                               euro adhoc

Further inquiry note:

Markus Heidler
+49 (0) 5341/21-6105
heidler.m@salzgitter-ag.de

Branche: Iron & Steel
ISIN: DE0006202005
WKN: 620200
Index: DAX, Midcap Market Index, CDAX, Classic All Share, Prime All
Share
Börsen: Frankfurt / regulated dealing/prime standard
Berlin / free trade
Hamburg / free trade
Stuttgart / free trade
Düsseldorf / free trade
München / free trade
Hannover / regulated dealing

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