EANS-News: SALZGITTER AG - First Quarter of 2010 Salzgitter Group delivers an operating profit in the first quarter of 2010
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quarterly report
Salzgitter (euro adhoc) - In the first quarter of the financial year 2010, the ongoing economic recovery supported both the current order and capacity utilization situation as well as the further business outlook of the Salzgitter Group. The selling price trend for rolled steel and tubes products, however, failed to keep pace with the swift increase in the price of commodities. Moreover, the sale of products destined for the construction sector was hampered by the protracted wintry weather conditions. Given these generally favorable conditions, which were not without their limitations, the Group achieved an operating profit, thereby concluding the first quarter with a result much improved in comparison with a year ago.
The only slow recovery in selling prices in the Steel, Trading and Tubes divisions seen in the first months of 2010 from their lowest levels in the previous year resulted in Group external sales of EUR 1,924.8 million, which is still below the year-earlier figure (first quarter of 2009: EUR 2,194.7). The Salzgitter Group closed the first quarter with an operating pre-tax profit of EUR 2.6 million. This figure factors in accounting-related measures of EUR 27.7 million for project orders which have been booked and where the costs are no longer likely to be covered due to soaring commodity prices. The Group´s pre-tax loss of EUR -17.1 million (first quarter of 2009: EUR -98.3 million) includes EUR 19.7 million worth of provisions formed for streamlining measures. The after-tax loss stood at EUR -13.3 million (first quarter 2009: EUR -74.1 million), bringing earnings per share to EUR -0.27. Return on capital employed (ROCE) was still marginally negative (-1.0 %; first quarter of 2009: -7.7 %).
External sales by Division (EUR million):
Q1/2010 (Q1/2010) Steel 516.1 (427.7) Trading 657.7 (926.9) Tubes 449.4 (552.0) Services 88.0 (83.4) Technology 199.8 (192.5) Others 13.8 (12.1) Group 1,924.8 (2.194.7)
Earnings before tax by Division (EUR million EBT):
Q1 2010 (Q1/2009) Steel -31.0 (-129.7) Trading 4.0 (-20.6) Tubes 2.6 (50.8) Services 5.1 (-3.2) Technology -13.3 (-23.3) Others 15.5 (27.7) Group -17.1 (-98.3)
The immense and rapid fluctuations in the cost and price of commodities have reduced planning certainty to a minimum. Irrespective of the sustained global recovery in the steel markets, a reliably quantified outlook for sales and the results of the Salzgitter Group cannot therefore be given for the financial year 2010. In consideration of the currently discernible risks and potential, we nonetheless believe that achieving near breakeven may be possible in the current financial year.
As in recent years, we make special and explicit reference this time to the fact that opportunities and risks from currently unforeseeable trends in selling prices, input materials and capacity level developments, as well as changes in the currency parity, may considerably affect performance in the course of the financial year 2010. The resulting fluctuation in the consolidated pre-tax result may, as current events show, be within a considerable range, either to the positive or to the negative. The dimensions of this range become clear if one considers that, with around 6 million tons of steel products left to be sold this year by the Steel, Trading and Tubes divisions, an average EUR 30 deviation in the margin per ton is sufficient to cause a variation in the annual result of more than EUR 180 million.
More information can be found in the full press release and interim report published today (please refer to: www.salzgitter-ag.de).
end of announcement euro adhoc --------------------------------------------------------------------------------
Further inquiry note:
Markus Heidler
+49 (0) 5341/21-6105
heidler.m@salzgitter-ag.de
Branche: Iron & Steel
ISIN: DE0006202005
WKN: 620200
Index: DAX, Midcap Market Index, CDAX, Classic All Share, Prime All
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Börsen: Frankfurt / regulated dealing/prime standard
Berlin / free trade
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Original content of: Salzgitter AG, transmitted by news aktuell