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Voestalpine cleared over announcement of Texas cost overruns
February 9, 2017 / 11:54 AM / 9 months ago

Voestalpine cleared over announcement of Texas cost overruns

VIENNA (Reuters) - Austria’s financial watchdog has cleared steelmaker Voestalpine (VOES.VI) of any wrongdoing over the way it informed investors of cost overruns at its Texas plant, both parties said on Thursday.

The logo of Austrian specialty steel maker Voestalpine is seen in front of the company's premises in Linz, Austria September 7, 2016. REUTERS/Heinz-Peter Bader

Voestalpine announced plans to invest 550 million euros ($588 million) in a state-of-the-art plant in Corpus Christi, Texas, in 2013, its largest foreign investment so far.

In January, it said the cost of the U.S. plant would rise to about $990 million, prompting the FMA watchdog to investigate whether Voestalpine had met European Union rules to immediately publish information relevant to its share price.

“This (FMA) audit did not uncover any anomalies and the FMA investigation was ended,” Chief Executive Wolfgang Eder told a conference call. “Voestalpine has therefore complied with all provisions of the stock exchange act and did not violate any obligation to issue an ad hoc disclosure.”

A spokesman for the FMA confirmed this.

Voestalpine also posted a 3.3 percent drop in nine-month revenue to 8.1 billion euros ($8.7 billion), but reiterated its full-year guidance for adjusted core profit (EBITDA) of around 1.45 billion euros and operating profit (EBIT) of around 814 million euros.

The group said it expected earnings to grow significantly in the fourth quarter due to stabilizing raw material prices, a stronger oil and gas sector and higher steel contract prices.

Earnings before interest, tax, depreciation and amortization (EBITDA) for the nine months to the end of December fell 12 percent to 1.06 billion euros.

Stripping out one-off effects in the previous year, however, would reduce that decline to 0.8 percent, Voestalpine said.

At 1140 GMT, Voestalpine shares were down 1.2 percent at 38.825 euros.

($1 = 0.9351 euros)

Additional reporting by Francois Murphy; Editing by Francois Murphy and Mark Potter

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