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Salzgitter AG with an encouraging start to the year

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Autor: Redaktion

Datum: 12. Mai. 2021

12.05.2021. The Salzgitter Group has announced its results for the first quarter of 2021. Therefore, the Group generated earnings before taxes of 117.3 million € in the first quarter of the financial year 2021. Against the backdrop of a sustained recovery in the market and an uptrend in steel prices, this performance was especially attributable to the gratifying results of the Strip Steel and Trading business units, as well as a contribution of 42.5 million € from Aurubis AG, a participating investment included at equity (IFRS accounting) (Q1 2020:  -18.7 million €). Almost all segments reported a steady increase in their monthly results over the course of the quarter.

Results

The Salzgitter Group’s external sales remained stable compared with the year-earlier level (2,094.1 million €; Q1 2020: 2,108.3 million €). Earnings before taxes came in at 117.3 million € (Q1 2020: -31.4 million €). An after-tax result that stood at 76.6 million € (Q1 2020: -43.7 million €) brings earnings per share to 1.38 € (Q1 2020: -0.83 €) and return on capital employed to 13.2 % (Q1 2020: -2.4 %). The equity ratio amounted to 33.0 % (Q1 2020: 35.3 %). In addition, – compared with the respective costs of procurement – the hidden reserves not evident from the balance sheet from the acquisition of our participating investment in Aurubis AG and the CO2 allowances purchased as a precautionary measure for the fourth period of the EU greenhouse gas emission trading scheme that commenced on 1 January 2021, meanwhile amount to over 1 billion €.

Chief Executive Officer Prof. Dr.-Ing. Heinz Jörg Fuhrmann: “With Salzgitter AG remaining on track in the challenging past year through drawing on its own resources thanks to rigorous coronavirus management and the measures taken at an early stage to secure earnings and liquidity, I am pleased with the successful start to the year 2021. The quarterly results and improved business activity give us every reason to be optimistic about how the year will develop going forward. The key foundations have also been laid for the Salzgitter Group’s long-term success: The company is robustly positioned in terms of its financial position and balance sheet, even as the coronavirus crisis diminishes. We have a well-diversified and balanced product portfolio in place. We will consistently forge ahead as a pioneer in low CO2 steel production. As part of the “Wind Hydrogen (WindH2)” project that enables us to gain valuable experience in the important field of “hydrogen from renewable energies” essential to SALCOS®, we commissioned a 2.5 MW PEM electrolysis plant in March 2021. Germany’s only cross-sector project at present will produce green hydrogen with electricity generated by wind power on the site of the steelworks in Salzgitter. Next week will already set another milestone: a groundbreaking ceremony to mark the start of the construction of a demonstration plant, that will realise the world’s first direct reduction process making flexible use of natural gas and hydrogen.”

Outlook

In view of the good start to the year and the dynamic increase in rolled steel prices – nevertheless also with explicit reference to the still imminent risk of the coronavirus pandemic – the Salzgitter Group now anticipates the following in the financial year 2021:

  • an increase in sales to more than 8.5 billion €
  • a pre-tax profit of between 300 million € and 400 million €
  • a return on capital employed (ROCE) that is tangibly above the previous year’s figure.

Salzgitter also makes reference to the fact that further opportunities and risks from currently unforeseeable trends in selling prices, input material prices and capacity level developments, as well as changes in the exchange rates, may considerably affect performance in the course of the financial year 2021. The resulting fluctuation in the consolidated pre-tax result may be within a considerable range, either to the positive or to the negative.

 

(Source: Salzgitter)