Salzgitter Group with successful start to the year
by Hans Diederichs
“We can look back on the best first quarter since 2008 with a result that was also better than expected at the turn of the year due to accounting-related effects. Key stimulus determining the steady uptrend in the last five years has been derived from the successful implementation of our own measures. We therefore have every reason to be confident: We have already achieved a great deal! We will continue to forge ahead in a focused manner in the future as well. In the face of emerging economic headwind, and in view of the uncertainties in the political environment, it is indispensable that we continue our intensive endeavours to develop and optimize further with fresh impetus,” states Chief Executive Officer Prof. Dr.-Ing. Heinz Jörg Fuhrmann.
The external sales of the Salzgitter Group came in at € 2.3 billion, thereby unchanged against the previous year’s period (Q1 2018: € 2.3 billion). With the development of the Strip Steel Business Unit remaining virtually stable, the decline in the Plate / Section Steel Business Unit was compensated by the other business units. The pre-tax earnings of € 125.9 comprise a € 50.2 million contribution from the Aurubis investment (Q1 2018: € 7.5 million) that included € 18.3 million in reporting-date related valuation effects (Q1 2018: € –6.3 million) essentially from positive precious metal price developments. Given the volatility, we cannot assume that this trend will continue over the remainder of the year. Moreover, the contribution from the Aurubis investment includes € 20.0 million (Q1 2018: € 0) in income from an accounting adjustment through profit and loss in connection with shares acquired in Aurubis AG in the first quarter of 2019 at average price below the market value of the pro rata equity capital. The after-tax result stood at € 96.7 million (Q1 2018: € 65.2 million). Earnings per share were therefore recorded at € 1.76 (Q1 2018: € 1.18) and return on capital employed at 14.1 % (Q1 2018: 11.6 %).
Salzgitter AG affirms its forecast for the financial year 2019. We continue to anticipate a slight increase in sales to above the € 9.5 billion mark, a pre-tax profit (EBT) of between € 125 million and € 175 million and a return on capital employed (ROCE) that is tangibly below the previous year's figure.
Following a strong first quarter, we currently expect a pre-tax result rather more in the upper end of the aforementioned range. However, with reference to the unstable economic situation, not only in the EU, and the associated reduced forecasting reliability for the remainder of the financial year, we consider revising the forecast to be premature at present.
Source: Salzgitter AG / Photo: Fotolia