August 8, 2018 / 6:46 AM / 3 months ago

Steelmaker Voestalpine's profits in line, U.S. tariff effect unclear

VIENNA, Aug 8 (Reuters) - Austrian specialty steelmaker Voestalpine’s first-quarter operating and net profits broadly met expectations as demand from the auto and oil sectors improved, although uncertainty on the effect of U.S. import tariffs remains.

Earnings before interest and tax (EBIT) fell 1.5 percent year-on-year, partly because of higher depreciation, to 323.8 million euros ($376.1 million) in the three months to the end of June. That was roughly in line with an average estimate of 327 million euros in a Reuters poll of analysts.

Net profit after minorities rose 3 percent to 213.9 million euros, compared to the poll average of 214 million euros.

“The demand from the automotive market increased once again and also market dynamics in the oil and gas segment improved,” the company said on Wednesday, adding that there were signs of a recovery in the rail sector in terms of volume but prices had not kept pace because of “stiff competition”.

The company confirmed its outlook of largely unchanged core and operating profit for the business year, extending its forecast for a favourable economic climate until the end of 2018, although that still depended on the impact of new U.S. import tariffs which it said were difficult to predict.

“Recent decisions in this regard have triggered both positive and negative effects in North America — albeit differently for each sector — even though the uncertainty regarding the fallout in the medium and long term of the ‘America First’ philosophy ... seems to have been growing of late,” it said. ($1 = 0.8609 euros) (Reporting by Francois Murphy; Editing by Michael Shields)

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