Voestalpine: Lower Net Income Expected

Published: May 14, 2012; 18:50 · (Vindobona)

As the steel price is expected to rise, voestalpine´s steel division has favorable prospects. The profit level of 2010/11 will not be reached.

Voestalpine: Lower Net Income Expected / Picture: © Vindobona.org

Voestalpine´s CEO Wolfgang Eder is optimistic for the steel division. In April, a price increase on a part of the company´s steel products could be enforced. Steel prices were up by 10 to 15%. The market seems to be relatively volatile, though. “The volatility has sharpened extremely. However, we attempt to achieve a price increase for the other products in July. Then we can see the development until fall relatively relaxed.” Eder adds.

The market conditions would change within a short period of time. In the past, the steel business cycle was about three to four years. Now, the steel business cycle would be only one year. “We have to adapt our systems and design new building cycles.” The three other divisions of voestalpine (Special Steel, Metal Forming and Rail Systems) show a stable performance, Eder asserts.

The steel division is anticipated to show better results in the first half of 2012/13 compared to the second half of 2011/12. The division “Steel” makes a contribution of one third to the group´s revenues. In 2010/11, voestalpine´s revenues totaled € 11bn. Operating profits of € 985m were achieved. The operating profit in 2011/12 is expected to be 10% down. However, voestalpine has to set aside reserves of € 205m because of a railway cartel proceeding in Germany.