Salzgitter AG, a prominent player in the European steel industry, has encountered a challenging economic environment in the first nine months of 2024. The company has been navigating the effects of high imports and uncompetitive energy costs, which have significantly impacted its steel-related activities. Despite these hurdles, Salzgitter AG has managed to achieve an operationally balanced result, largely thanks to its strategic diversification and strong performance in the Technology division.
The company's external sales experienced a decline, falling to €7.7 billion from €8.4 billion in the same period of 2023. This decrease was primarily due to lower prices for most rolled steel products. Consequently, the company's earnings before interest, taxes, depreciation, and amortization dropped to €320.6 million, and pre-tax earnings fell to a loss of €141.2 million. However, a significant contribution of €107.6 million from its equity-accounted investment in Aurubis AG and strong results from the Technology division helped offset some of these losses.
Salzgitter AG's CEO, Gunnar Groebler, emphasized the dual focus of the company's strategy: maintaining competitiveness in the current market and ensuring future viability through the "Salzgitter AG 2030" strategy. This strategy is closely linked to transforming steel production, with significant progress made in implementing the SALCOS® project. The first plant components have been delivered, and construction of the reactor tower for the direct reduction plant has begun. Additionally, the sale of the Mannesmann Stainless Tubes Group aligns with the company's long-term strategic goals.
The financial challenges faced by Salzgitter AG were further compounded by impairments totaling around €150 million, primarily from the adjustment of fixed assets in the Mannesmann Precision Tubes Group. Despite these setbacks, the company reported earnings after tax of €197.7 million, resulting in earnings per share of €3.74. The equity ratio remained solid at 43.3%, showcasing the company's financial resilience amid market volatility.
Birgit Potrafki, Salzgitter AG's Chief Financial Officer, highlighted the necessity of clear measures and a focused strategy for sustainable profitability. The company's "Performance 2026" program, alongside additional short-term measures, aims to stabilize earnings and secure liquidity. Structural adjustments are also being discussed with employee representatives to ensure the long-term sustainability of the Salzgitter Group.
Looking ahead, Salzgitter AG anticipates revenue between €9.5 billion and €10.0 billion for the full year of 2024. The company expects EBITDA to range between €275 million and €325 million, with a pre-tax loss projected between €275 million and €325 million. Despite these forecasts, Salzgitter AG remains committed to navigating the current economic landscape while focusing on its strategic transformation initiatives.
