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Earnings

Steelmaker Voestalpine sees recovery in auto industry

FILE PHOTO: The logo of steelmaker Voestalpine stands in front of the steel plant Donawitz in Leoben, Austria, August 11, 2018. REUTERS/Lisi Niesner

BERLIN (Reuters) - Speciality steelmaker Voestalpine VOES.VI reported a fourth consecutive quarterly loss on Tuesday with demand still subdued by the pandemic, but said a gradual recovery was underway.

The company, which specialises in making finished parts for the automotive, aerospace and rail industries, said there had been a “considerable rebound” in major sectors in the second quarter, including in the European and the U.S. automotive industry, as well as in consumer goods and construction.

It posted a loss of 206 million euros ($243.5 million) for the July to September period, its second quarter, compared with a profit of 24.8 million euros in the prior-year period.

Voestalpine's comments echo those from Japan's biggest steelmaker Nippon Steel 5401.T, which has raised its annual crude steel output plan partly due to a strong recovery in demand from automakers. The world's largest steelmaker ArcelorMittal MT.LUMT.AS has also reported improved demand in all regions.

Voestalpine said it expects the gradual recovery to continue even though the COVID-19 pandemic has intensified. However, Chief Executive Herbert Eibensteiner warned that “it remains to be seen despite positive market signals how the renewed lockdown measures in Europe will impact the economy.”

In China, capacity utilisation has returned to pre-crisis levels, Voestalpine said. The group restarted its furnace in the city of Linz in September after shutting it down temporarily due to low demand for high quality steel products.

The Linz-based group reported a 19.7% fall in earnings before interest, tax, depreciation and amortisation (EBITDA) to 237 million euros on revenue of 2.7 billion euros, which was a fall of 15.6%, in the period.

It said it still expects full-year EBITDA of 800 million to 1 billion euros compared with 1.2 billion euros last year.

($1 = 0.8460 euros)

Reporting by Kirsti Knolle; Editing by Michelle Adair, Kirsten Donovan

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