FRANKFURT (Reuters) - German steelmaker Salzgitter (SZGG.DE) sees a further rise in profit this year as steel prices rise and restructuring measures continue to bear fruit, its chief executive told German markets daily Boersen-Zeitung in an interview.
Heinz Joerg Fuhrmann added that he was not overly concerned about U.S. President Donald Trump’s order that American steel should be used for pipelines built in the United States, and said that Salzgitter may profit from a U.S. infrastructure programme.
Salzgitter has forecast 2016 pretax profit of 30 million to 60 million euros (£25.9 million to £51.8 million) on sales that are expected to be more than 8 billion euros. Fuhrmann said orders were on the rise, and better than a few months ago.
“For 2017, I wouldn’t rule out a fourth increase in group profit in a row or a pretax profit in triple-digit millions of euros,” he said. “But 2017 is only four weeks old and we will still experience plenty of surprises.”
Salzgitter is due to report 2016 results on Feb. 28.
Fuhrmann said it remains to be seen whether it would be possible to source the steel for the pipes Salzgitter builds in the United States domestically. Salzgitter makes 8.5 percent of its revenue in the United States, a third of which comes from products it manufactures there.
He said Salzgitter would also have to rethink an idea to build up in production in Mexico, given Trump’s threat to tear up the NAFTA free trade agreement between the United States, Mexico and Canada. “Luckily, we have not set any investments in motion yet,” Fuhrmann said.
But he added: “There are activities that could profit from a possible infrastructure programme. There is a downside but it’s limited. We remain relaxed and wait.”
Reporting by Georgina Prodhan, editing by Louise Heavens