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    SZG   DE0006202005

SALZGITTER AG

(SZG)
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Delayed Xetra  -  11:35 2022-09-29 am EDT
19.61 EUR   -7.85%
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Germany's Salzgitter seeks exemption from national gas rationing

08/15/2022 | 07:37am EDT
FILE PHOTO: Steel rolls are pictured at the plant of German steel company Salzgitter AG in Salzgitter

FRANKFURT (Reuters) - Salzgitter AG, Germany's second-largest steelmaker, is in talks with regulators in a bid to secure exemption from potential gas rationing, saying its production was vital for Germany's broader energy security plans and local city heating.

Salzgitter is one of several major companies seeking exemption from any rationing should there be a further reduction in gas supply from Russia, which is now delivering just a fifth of agreed volumes via the Nord Stream 1 pipeline.

Salzgitter makes the pipes needed to connect two planned liquefied natural gas (LNG) terminals with the national grid, giving the group a key role in Germany's efforts to reduce reliance on Russian energy.

"We are thus part of the solution to the question of greater energy independence," Salzgitter Chief Executive Gunnar Groebler told Reuters.

Asked if Salzgitter might have to halt operations, the CEO who took charge last year said: "We've been getting the question again and again: What will happen if Salzgitter is completely shut down? I would say that this is relatively unlikely."

Groebler, a former executive at Swedish power utility Vattenfall, said his company was also a district heating supplier to the city of Salzgitter, giving it a prominent role in local energy supply.

Heat generated by the company's production processes are fed back into the district heating system, which Groebler said could be affected if production was halted: "That's about 100,000 residents who would then have no hot water and no heating."

Salzgitter is also the third-largest supplier of drinking water in the German state of Lower Saxony where it is based and which holds a 26.5% stake in the steelmaker, Groebler said, adding to knock-on challenges if Salzgitter had to shut down.

Germany is now at phase two of a three-stage emergency plan that envisages gas rationing in the final stage. Industry consumes about a quarter of gas used in Germany.

Groebler, 50, said Salzgitter was in talks with Germany's network regulator, which would be in charge of rationing, and was discussing the issue with the Federal Network Agency, which has sent questionnaires to industry about their usage.

Salzgitter is a member of the German Steel Federation, which is also talking to the regulator.

Groebler said Salzgitter reduced energy consumption by more than 20% compared to last year, partly because of lower steel demand expected in the second half of the year.

Only three of four heating furnaces for the hot strip mill in Salzgitter were in operation, he said, adding: "This is economically driven ... but of course it is also our contribution to the current savings discussion."

(Reporting by Christoph Steitz; Editing by Edmund Blair)

By Christoph Steitz


© Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
AUSTRALIAN DOLLAR / US DOLLAR (AUD/USD) -0.02% 0.65008 Delayed Quote.-11.37%
BRITISH POUND / US DOLLAR (GBP/USD) 2.74% 1.11306 Delayed Quote.-20.72%
CANADIAN DOLLAR / US DOLLAR (CAD/USD) -0.38% 0.7304 Delayed Quote.-7.88%
EURO / US DOLLAR (EUR/USD) 1.12% 0.98157 Delayed Quote.-14.64%
INDIAN RUPEE / US DOLLAR (INR/USD) -0.07% 0.012274 Delayed Quote.-8.86%
NATIONAL GRID PLC -3.30% 937.4 Delayed Quote.-8.53%
NEW ZEALAND DOLLAR / US DOLLAR (NZD/USD) 0.33% 0.57341 Delayed Quote.-17.64%
POWER SOLUTIONS, LTD. 2.51% 2530 Delayed Quote.8.30%
S&P GSCI NATURAL GAS INDEX 0.01% 321.8935 Real-time Quote.87.08%
S&P GSCI REDUCED ENERGY INDEX (CPW2) 0.07% 574.6751 Real-time Quote.5.98%
SALZGITTER AG -7.85% 19.61 Delayed Quote.-32.27%
US DOLLAR / RUSSIAN ROUBLE (USD/RUB) -2.04% 56.75 Delayed Quote.-22.40%
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Financials
Sales 2022 11 945 M 11 667 M 11 667 M
Net income 2022 988 M 965 M 965 M
Net Debt 2022 536 M 523 M 523 M
P/E ratio 2022 1,12x
Yield 2022 4,62%
Capitalization 1 061 M 1 036 M 1 036 M
EV / Sales 2022 0,13x
EV / Sales 2023 0,11x
Nbr of Employees 23 916
Free-Float 38,5%
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Mean consensus HOLD
Number of Analysts 12
Last Close Price 19,61 €
Average target price 30,13 €
Spread / Average Target 53,7%
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Managers and Directors
Gunnar Groebler Chief Executive Officer
Burkhard Becker Chief Financial Officer
Heinz-Gerhard Wente Chairman-Supervisory Board
Uwe Kruse Chief Information Officer
Roland Flach Member-Supervisory Board
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