While revenue declined slightly by 2.6% in the first half of 2013/14 compared to the same period in the previous year, going from EUR 1,979.6 million to EUR 1,928.3 million, the losses in the EBITDA and EBIT reporting categories were significantly higher. While the first quarter of 2013/14 recorded slightly higher figures in a year-to-year comparison, the development of the following quarter ran completely counter to the previous year. While the second quarter of 2012/13 experienced significantly falling raw materials prices, in the second quarter of the current business year, prices for iron ore, the most important input material, rose considerably, contrary to the expectations of the steel industry. This presented difficulties in price negotiations with customers for the second quarter of the business year, as in the spring, the prospect of declining raw materials prices had been held out.
Despite the fact that both production and delivery volumes grew in the first half of 2013/14, the pressure on margins could not be compensated by the results. An additional adverse impact on earnings in the second quarter of 2013/14 were EUR 10 million in non-recurring expenditures for early termination of a long-term contractual relationship that was unfavorable for the Steel Division (this negative effect will be compensated by commensurate positive effects in the next two business years). Compared to the first six months of the previous year, in the first half of 2013/14, the operating result (EBITDA) was reduced by 16.4% from EUR 236.6 million to EUR 197.9 million, and profit from operations (EBIT) fell by 31.2% from EUR 123.2 million to EUR 84.8 million. Therefore, the EBITDA margin was adjusted down from 11.9% in the previous year to 10.3% for the first half of 2013/14, and the EBIT margin went from 6.2% to currently 4.4%.
Compared to the immediately preceding quarter, revenue declined by 5.2% from EUR 989.8 million in the first quarter of 2013/14 to EUR 938.5 million in the second quarter of 2013/14 due to smaller average revenues and lower production and delivery volumes resulting from seasonal effects. This development and the aforementioned non-recurring effect of EUR 10 million resulted in EBITDA that decreased by 22.2% from EUR 111.3 million (margin of 11.2%) to EUR 86.6 million (margin of 9.2%). EBIT dropped by 46.7% from EUR 55.3 million to EUR 29.5 million, resulting in a reduction of the EBIT margin from 5.6% to 3.1%.
As of the reporting date of September 30, 2013, the number of employees (FTE) in the Steel Division was 11,026, an increase of 4.1% compared to the end of the second quarter of the business year 2012/13 and 3.3% higher than the comparable figure at the end of the last business year (10,676 FTE).