Salzgitter Group announced its financial results for the first quarter of 2025. Accordingly, the company reported a loss after tax of EUR 34.6 million. This loss was due to the weak economic momentum and geopolitical trade policy uncertainties facing the company. In the same quarter of 2024, the company posted a profit of EUR 15 million. Furthermore, the group reported EUR 78.6 million in earnings before interest, taxes, depreciation and amortization (EBITDA). However, external sales decreased by 13% to EUR 2.33 billion compared to the same period a year earlier. The decrease was driven by weaker selling prices and trading volumes, as well as the end of the consolidation of the stainless tubes group in October 2024.
Expenses from Derivative Positions and Portfolio Simplification
In the reporting period, the valuation of derivative positions resulted in an expense of EUR 23 million. Furthermore, the company faced an impairment risk of EUR 10 million due to the planned portfolio simplification process. Nevertheless, EBITDA ( EUR 78.6 million) and the result before tax (EUR -27.3 million) were lower than in the same quarter of the previous year. However, Aurubis AG, the participating investment included in equity (according to IFRS accounting), contributed EUR 48 million (Q1 2024: EUR 23.9 million) and had a significantly positive impact on the company's financial performance.
Performance of the Business Units
The Trading Business Unit turned from a loss to a profit. However, the results of the Steelmaking and Steel Processing business units reflected the impact of sluggish economic developments, particularly in Germany. This was a reflection of the general economic difficulties in the sector.
Return on Capital and Net Position
Return on capital employed (ROCE) came in at 0.5%, down y/y (Q1 2024: 2.6%). The company's equity ratio remained at a very solid 43.4% (Q1 2024: 45.6%). In addition, as part of the revenue impact planned for 2025, the P28 program aims to generate a revenue impact of around EUR 500 million.
Financial Condition and Management Assessment
Birgit Potrafki, Chief Financial Officer of the Salzgitter Group, noted that the economic environment in the first quarter of 2025 was quite challenging. Taking into account derivative position expenses of EUR 23 million and portfolio simplification impairment risk of EUR 10 million, the company achieved a marginally positive result, Potrafki said. She also noted that short-term challenges remain, especially for Germany, where the International Monetary Fund (IMF) and the German government have downgraded their growth expectations to zero.
Future Prospects
Commenting on the company's future targets, Potrafki stated that they will continue to take measures to strengthen revenues and liquidity. In this context, she stated that they expanded the performance program at the beginning of the year and aimed to achieve a revenue impact of EUR 500 million instead of the old targets. By the end of 2024, around EUR 130 million of this revenue impact had been realized, with a contribution of EUR 14 million in the first quarter of 2025.
2025 Prospects and Sales Forecasts
For 2025, the Salzgitter Group forecasts sales between EUR 9.5 billion and EUR 10.0 billion. Furthermore, EBITDA is expected to be between EUR 350 million and EUR 550 million. The pre-tax result is estimated between EUR -100 million and EUR +100 million. Return on capital employed (ROCE) is expected to be slightly above last year's figures.
However, the group emphasized that unforeseen factors such as selling prices, input material prices and capacity level developments, as well as exchange rate fluctuations could significantly impact business performance during the 2025 financial year. The impact on performance could be in a significant range, either positive or negative.
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