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Salzgitter delivers strong result in the second quarter

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Autor: Redaktion

Datum: 11. Aug. 2021

11.08.2021. In the first half of 2021, the Salzgitter Group has generated the highest pre-tax result since the exceptional financial years 2007 and 2008. The drivers of this result consisted of the dynamic uptrend in rolled steel prices over the course of the first six months, coupled with a sustained recovery in the market that had a particularly positive impact on the performance of the Strip Steel and Trading business units. The contribution from the participating investment in Aurubis AG was once again very gratifying.

Results

The Salzgitter Group’s external sales rose to 4,435.5 million € in the first six months of the financial year 2021, significantly outperforming the year-earlier period that was determined by the Covid-19 pandemic (H1 2020: 3,631.0 million €). Profit before taxes of 305.7 million € (H1 2020: -127.8 million €) includes the contribution of 91.0 million € from the participating investment in Aurubis AG accounted for pursuant to the equity method (IFRS accounting) (H1 2020: 34.0 million €). An after-tax result that stood at 230.6 million € (H1 2020: -144.7 million €) brings earnings per share to 4.20 € (H1 2020: -2.70 €) and return on capital employed to 16.4 % (H1 2020: -6.3 %).

The equity ratio remained at a very sound 33.3 %. Despite the greater volume of business and higher prices for raw materials and finished products, the net financial position of -422.5 million € settled around the level of the year-end 2020 reporting date (-431.7 million €). The value of the CO2 allowances procured for the fourth period of the EU greenhouse gas emission trading scheme that commenced on 1 January 2021 meanwhile amount to almost 1 billion €.

Outlook

Provided that the market continues its stable development in the second half of the year despite the latent coronavirus crisis, we affirm our forecast for the financial 2021 that was revised upward in June and anticipate the following for the Salzgitter-Group:

  • an increase in sales to more than € 9 billion,
  • a pre-tax profit of between € 400 million and € 600 million, and
  • a return on capital employed (ROCE) that is tangibly above the previous year’s figure.

Statement

Gunnar Groebler, incumbent Chief Executive Officer since 1 July 2021, said:

“The Salzgitter Group recorded its best half-year result for more than a decade. This pleasing result is not only evidence of our performance capabilities, but also gives us tailwind for the tasks to be addressed. In the past three months, I have visited many Group companies in all the business units and engaged in intensive discussion with the colleagues there. The potential of the Salzgitter Group is impressive. We have initiated an internal process to follow on after the successful “Salzgitter AG 2021” corporate strategy and to set the course for the coming years. We will take the time we need for devising the new corporate strategy and expect to present it in the spring of 2022. Key components of the strategy will include the topics of sustainability and decarbonisation in particular.

 

The swift realisation of our SALCOS® (SAlzgitter Low CO2 Steelmaking) concept for low CO2 steel production remains a decisive factor. Our ambition is to be able to start hydrogen-based steel production by the end of 2025. This is the course we will take to gradually reducing CO2 emissions by 30 % in the period up to 2030, and to lowering our CO2 footprint by more than 95 % by 2050 at the latest, thereby eliminating around 1 % of Germany’s current emissions. As is the case with the entire sector, we are on the threshold of a fundamental and far-reaching transformation and I believe that we are well-equipped to successfully master this sea change. I’m greatly looking forward to tackling the tasks and challenges that lie ahead together with the entire management team.”

 

(Source: Salzgitter AG)