Salzgitter Group with successful start to the year
Another year-on-year increase in earnings before taxes
Internal program of measures as the foundation of this performance
Forecast for the financial year 2019 affirmed:
slight increase in sales to above the € 9.5 billion mark,
pre-tax profit of between € 125 million and € 175 million; likely in the upper end of the range
Against the backdrop of an increasingly competitive environment, the Salzgitter Group generated earnings before taxes of € 125.9 million (Q1 2018: € 95.9 million). Along with the very satisfactory pre-tax result of the Strip Steel Business Unit, all other business units and the participating investment in Aurubis AG, a company included at equity, contributed to the positive start to the year.
'We can look back on the best first quarter since 2008 with a result that was also better than expected at the turn of the year due to accounting-related effects. Key stimulus determining the steady uptrend in the last five years has been derived from the successful implementation of our own measures. We therefore have every reason to be confident: We have already achieved a great deal! We will continue to forge ahead in a focused manner in the future as well. In the face of emerging economic headwind, and in view of the uncertainties in the political environment, it is indispensable that we continue our intensive endeavors to develop and optimize further with fresh impetus,' states Chief Executive Officer Prof. Dr.-Ing. Heinz Jörg Fuhrmann.
The external sales of the Salzgitter Group came in at € 2.3 billion, thereby unchanged against the previous year's period (Q1 2018: € 2.3 billion). With the development of the Strip Steel Business Unit remaining virtually stable, the decline in the Plate / Section Steel Business Unit was compensated by the other business units. The pre-tax earnings of € 125.9 comprise a € 50.2 million contribution from the Aurubis investment (Q1 2018: € 7.5 million) that included € 18.3 million in reporting-date related valuation effects (Q1 2018: € -6.3 million) essentially from positive precious metal price developments. Given the volatility, we cannot assume that this trend will continue over the remainder of the year. Moreover, the contribution from the Aurubis investment includes € 20.0 million (Q1 2018: € 0) in income from an accounting adjustment through profit and loss in connection with shares acquired in Aurubis AG in the first quarter of 2019 at average price below the market value of the pro rata equity capital. The after-tax result stood at € 96.7 million (Q1 2018: € 65.2 million). Earnings per share were therefore recorded at € 1.76 (Q1 2018: € 1.18) and return on capital employed at 14.1 % (Q1 2018: 11.6 %).
Salzgitter AG affirms its forecast for the financial year 2019. We continue to anticipate:
a slight increase in sales to above the € 9.5 billion mark,
a pre-tax profit (EBT) of between € 125 million and € 175 million and
a return on capital employed (ROCE) that is tangibly below the previous year's figure.
Following a strong first quarter, we currently expect a pre-tax result rather more in the upper end of the aforementioned range. However, with reference to the unstable economic situation, not only in the EU, and the associated reduced forecasting reliability for the remainder of the financial year, we consider revising the forecast to be premature at present.
The complete report released on the results of the first half of 2019 can be viewed at:
We make reference to the fact that imponderables, including changes in the cost of raw materials, precious metal prices and exchange rates, along with global trade policy measures, may still have a considerable impact over the course of the financial year 2019. The dimensions of this range become clear if one considers that, with around 9 million tons of steel products to be sold by the Strip Steel, Plate / Section Steel, Mannesmann and Trading business units through to the end of the year, an average € 10 change in the margin per ton is already sufficient to cause a variation in the annual result of € 90 million.
Disclaimer: Some of the statements made in this report possess the character of forecasts or may be interpreted as such. These are made to the best of the Company's knowledge and judgment, and by their nature are subject to the proviso that no unforeseeable deterioration occurs in the economy or in the specific market situation pertaining to the business units' companies, but rather that the underlying bases of plans and outlooks prove to be accurate as expected with regards to their scope and timing. Notwithstanding prevailing statutory provisions and capital market law in particular, the Company accepts no obligation to continuously update any forward-looking statements that are made solely in connection with circumstances prevailing on the day of their publication.