SALZGITTER (dpa-AFX) - Steel manufacturer Salzgitter sees a slight recovery in 2023 after a weak year. The market environment should increasingly brighten over the course of the year, the company announced when presenting its annual figures in Salzgitter on Friday. Group CEO Gunnar Groebler believes that the European and, in particular, the German steel industry will remain under pressure. In 2024, he expects only slight sales growth at best.

The share was unable to maintain its initial price gains in the morning and slipped into the red by almost four percent over the course of the day. By midday, the stock, which is listed in the small-cap segment SDax, was still down 1.4 percent. Salzgitter thus extended its losses in the current year to a good 16 percent. With a drop of more than 30 percent, the share price performance over the past 12 months is even worse. Christian Obst, analyst at Baader Bank, called the outlook "very cautious" for all steel-related areas, but in line with market expectations.

In the past financial year, Salzgitter suffered from a cooling economy, high inflation and significantly lower steel prices. According to its own statements, Salzgitter believes that prices bottomed out in the final quarter. In addition, investments in decarbonization weighed on the results.

Group CEO Groebler now sees signs of recovery "worldwide" - with the exception of Germany, as he emphasized at the annual press conference. Germany has "not only an economic problem, but also a growth problem". Energy costs, a shortage of skilled workers, sluggish investment and excessive bureaucracy are slowing down growth.

The global steel market is also characterized by overcapacity. At European level, the manager expects growth in the current year, but starting from a low level. For the most important steel customer industries, he forecasts very weak development for the region in 2024.

Groebler does not believe that mergers - particularly in Germany - could solve the problems. He has yet to see a concept that solves the issue of overcapacity. Groebler does not see any advantages for Salzgitter itself from a merger of any kind. The idea of a merger between Salzgitter and thyssenkrupp 's steel business has been floated regularly for years.

Salzgitter is targeting sales of 10.5 billion to 11 billion euros for 2024, which would be equivalent to small growth at best. Management expects the operating result EBITDA to be between 700 and 750 million euros. Before taxes, this should result in a profit of 250 to 300 million euros. According to Salzgitter, the first quarter is likely to be characterized by the weaker environment in the second half of 2023.

Last year, external sales fell by 14 percent to 10.8 billion euros. Operating profit fell from 1.6 billion to 677 million euros. At around 204 million euros, Salzgitter also achieved significantly less after taxes than in the previous year, when just under 1.1 billion euros had been posted. However, the company had achieved a record result a year earlier, after the war in Ukraine, for example, had driven up steel prices.

The investment in the copper manufacturer Aurubis also brought in considerably less than in the previous year, after the Hamburg-based company had to accept losses in the millions due to fraud and theft. Salzgitter shareholders are to receive a dividend of €0.45 per share, after €1.00 for 2022.

The figures were in line with Salzgitter's forecast, which was lowered over the course of the year. Sales were slightly below expectations. However, Baader analyst Obst had hoped for significantly more in terms of the dividend./nas/mne/mis