voestalpine sees impact of economic slowdown and rising material costs
August 12, 2019
voestalpine Group, headquartered in Linz, Austria, has reported its results for the first quarter of its fiscal year 2019/2020. The group stated that the “macroeconomic environment has clouded over significantly since the start of the business year 2019/20,” due to international trade conflicts and the associated, growing weakness of the global economy, which strongly affects Europe’s export-oriented industries, and the automotive industry in particular.
The company reported €3.3 billion revenue for Q1 2019/20, down 3.8% from the previous year (€3.5 billion). Net profit was reported at €90 million, down from €226 million in 2018. In addition to the cooling economy and trade conflicts, a price increase in iron ore and CO2 emission certificates were cited as the main factors.
However, the company stated that thanks to its broad product portfolio it had succeeded, despite these challenges, in generating positive demand throughout key customer segments such as rail technology, aerospace, warehouse and welding technology. In addition, it stated that it was already working on counteracting market pressures through cost and efficiency improvement programmes across the group.
All four of the group’s divisions were said to have seen a slight decline in revenue, resulting mainly from declining delivery volumes. The start-up costs at the group’s automotive plant in Cartersville, USA, were also said to have resulted in downward pressure on earnings in the reporting period.
Herbert Eibensteiner, Chairman of the Management Board of voestalpine AG, stated, “The Management Board of voestalpine AG continues to work in a difficult environment, particularly with respect to the development of ore and steel prices, on achieving EBITDA for the current business year that is comparable to that of the previous business year even though the uncertainties have mounted since the start of the current business year.”