Salzgitter Reports Considerable Impact of COVID-19 on Sales
severely impacted by the economic disruptions caused by the Corona pandemic. After the second quarter in which the Group’s subsidiaries reported capacity utilization reductions of up to 70% compared with 2019, order intake gradually recovered from the early summer months onward. In combination with the measures implemented at short notice to secure earnings and liquidity, the results of the Strip Steel, Trading and Technology business units recovered partly discernibly in the third quarter.
The Salzgitter Group’s external sales declined by around one fifth to EUR 5,264.3 million due to lower volumes and prices (9M 2019: EUR 6,637.3 million). The pre-tax result came in at minus EUR 224.4 million (9M 2019: EUR 40.7 million). A countereffect emanated from the contribution of EUR 53.4 million (9M 2019: EUR 78.1 million) from Aurubis AG, an investment included at equity. An after-tax result stood at minus EUR 243.0 million (9M 2019: minus EUR 29.8 million)
Chief Executive Officer Prof Dr Ing Heinz Jörg Fuhrmann said “We reacted quickly and rigorously to the effects of the COVID-19 pandemic through the measures we took to secure earnings and liquidity. We are therefore on track, despite the significantly greater challenges in the current financial year, to achieving a pre-tax result in the year-earlier range excluding potential special effects in the context of the annual accounts. At the same time, we are forging ahead with securing the mid- and long-term future of the Salzgitter Group: Following the feasibility study agreed in June for the direct reduction of iron ore at Wilhelmshaven, we implemented further key components of our decarbonization strategy in the third quarter through commissioning the Salzgitter wind farm and taking delivery of the world’s most powerful high-temperature electrolyzer for the energy-efficient generation of hydrogen at Salzgitter Flachstahl. It gives me great pleasure that we will be in a position to offer our customers CO2-reduced, green strip steel before the end of 2020.”
Outlook - According to current estimates, the trough is likely to have bottomed out in the second and third quarter. The most recent events nevertheless show that the course of the pandemic in Germany and abroad, along with the associated development of the overall economic situation, remains subject to great uncertainty. In the light of the aforementioned, we anticipate the following for the Salzgitter-Group in the financial year 2020:
A notable reduction in sales
A pre-tax result roughly in the year-earlier range (Minus EUR 253.3 million) excluding potential special effects in the context of the annual accounts, as well as
A return on capital employed that is tangibly below the previous year's figure.