In the early part of the business year 2012/13, the performance of the Metal Engineering Division continued at a solid level as the high-quality products and demanding markets that the division specializes in are comparatively less severely affected by fluctuations in the economy. Nevertheless, the division was unable to fully match the comparative figures of the outstanding first quarter of the previous business year.
As a result of the execution of a number of large orders for premium qualities from the BRIC countries, the capacity of the Rail Technology business segment was very well utilized and, at the same time, the price level was quite satisfactory. In the first quarter of 2012/13, production of standard rails at the Duisburg site, which is slated to be closed, was operating with two shifts that were fully utilized. However, due to aggressive competition, prices were still not at a positive level. Viewed regionally, particularly the countries in Southern Europe have significantly reduced their investments in railway infrastructure due to their sovereign debt situation.
As a result of its strong worldwide presence, the Turnout Technology business segment continues to make a substantial contribution to the good performance of the Metal Engineering Division. It reports revenue at a high level, although the operating result has declined slightly. Reduced demand in Europe was compensated by a gratifying level of orders from North America, Brazil, South Africa, and Australia. Additionally, after a sharp drop in orders during the 2011 calendar year, China saw improved order patterns in the high-speed sector.
The Seamless Tube business segment continued to record robust sales in the last quarter due to brisk investment activity in the oil and gas segment, particularly in North America and the Middle East. The Wire business segment reported a stable earnings situation in the first quarter of 2012/13, although demand declined slightly. The Welding Technology business segment was characterized by an improved market environment for medium- and high-grade alloys, however, the market for standard grades did not fare as well.