October 12, 2008
Salzgitter sees record 2007 amid steel boom
Germany's second largest steelmaker Salzgitter announced that during the Q3 of 2007, demand for steel and tubes products remained lively, not only in Germany, but also throughout the rest of Europe and in most overseas markets. Against this extremely positive economic background, the Salzgitter Group set new record highs in its sales and operating profit for a nine month period.
Salzgitter in a statement said that “All divisions, especially Steel and Trading, contributed to lifting consolidated external sales by EUR 1.29 billion to EUR 7.50 billion.” It added that “Another contributing factor was the first time consolidation of Klöckner-Werke and Vallourec Précision Etirage, which were acquired at the start of the third quarter. Earnings before tax of EUR 980.4 million, generated solely through operations, outperformed the previous year’s figure of EUR 661.5 million by 48% YoY. In the period under review, profit after tax came to EUR 594.9 million; earnings per share amounted to EUR 10.38.
In the first three quarters of 2007, the combined shipments of rolled steel and processed products of the Steel Division exceeded the already outstanding level of the previous year’s period. The Division’s total sales marked a new record high at EUR 3.02 billion as the average product selling prices were considerably higher year on year. Owing to the outstanding profit performance of all its companies, the pre tax profit of the Steel Division, which came to EUR 569.5 million, surpassed the previous year’s figure by 89% YoY.
Total sales of the Tubes Division rose by 17% YoY to EUR 1.87 billion as compared to EUR 1.60 billion in 2006 on the back of firmer prices and the firs time consolidation of VPE. The gratifying trend of selling prices resulted in a vigorous rise in profit in all product segments, especially large diameter and stainless steel tubes. The pre tax profit of the consolidated tubes companies almost doubled to EUR 210.2 million.
In the Steel Division, European manufacturers’ restraint on production should have a positive impact in normalizing the situation of overstocked inventories of flat steel in the coming months. A necessary precondition is, however, that the situation concerning imports eases. The beams and plate business is likely to continue to develop well in future. The healthy demand for rolled steel and the rising price of raw materials should ensure that selling prices remain stable for the most part. Higher prices are also feasible for some products.
