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UPDATE 1-Kloeckner beats Q1 forecasts, invests in 3D printing
April 26, 2017 / 9:55 AM / 6 months ago

UPDATE 1-Kloeckner beats Q1 forecasts, invests in 3D printing

* Kloeckner sees “noticeable” increase in full-year EBITDA

* Buys 10 pct stake in 3D printing start-up BigRep

* Shares up 1.6 pct (New throughout)

By Georgina Prodhan

FRANKFURT, April 26 (Reuters) - German steel distributor Kloeckner & Co beat market expectations for first-quarter core profits thanks to a jump in steel prices, which it said it expected to stabilise this quarter, lifting its share price in early trading.

Kloeckner said it expected a “noticeable” increase in earnings before interest, tax, depreciation and amortisation (EBITDA) for the full year - which it quantified as 5-10 percent growth - after they more than quadrupled in the first quarter.

EBITDA of 77 million euros ($84 million) beat all the estimates in a Reuters poll, which averaged 74 million euros, and Kloeckner said it expected 60-70 million euros this quarter. Sales that grew 16 percent to 1.6 billion euros also beat consensus.

Chief Executive Gisbert Ruehl said he expected steel prices to rise by close to 2 percent over the full year in Europe and roughly 3 percent in the United States, and said Kloeckner could benefit from any new U.S. anti-dumping tariffs.

“We are more likely to be positively affected by U.S. tariffs than negatively,” he told reporters, saying Kloeckner imports only 7 percent of the steel it distributes in the United States, where it makes 40 percent of its sales.

Shares in Kloeckner jumped as much as 4.5 percent but later pared gains to trade 1.6 percent higher in a market weighed down by disappointing results from U.S. Steel.

“Beyond the beat on Q1 and the solid Q2 EBITDA guidance, it is the ‘notable increase’ in FY17E EBITDA which may imply that EU/US steel prices will remain relatively resilient in H217 from a very high H117E level,” wrote Berenberg analyst Alessandro Abate, who rates Kloeckner “hold”.

Kloeckner also said it had bought a 10 percent stake in Berlin start-up BigRep, which makes the world’s largest 3D printers at a cubic metre, for under 10 million euros.

It said it planned to use these 3D printers at its European and U.S. sites in a bid to increase its share of higher-value, finished products, and expected the market for 3D printing, or additive manufacturing, to grow by 20 percent a year.

Kloeckner said it had not participated in a previous BigRep funding round but had been impressed by large customers that BigRep had since managed to win including BMW, ABB and Airbus.

Additive manufacturing saves money on material costs by reducing the number of parts needed and saves time from design to manufacturing. Some industrial parts can already be made in this way and the technology is developing fast.

German steel producer and rival distributor Thyssenkrupp and U.S. industrial group General Electric both announced plans this week to invest in 3D printing in Germany. ($1 = 0.9170 euros) (Reporting by Georgina Prodhan; Editing by Ludwig Burger and Adrian Croft)

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