The first half of the business year 2015/16 was marked by a relatively stable development at a satisfactory level for the voestalpine Group. In the course of the summer, however, the global weakness in the energy market—particularly oil and natural gas—became increasingly evident. Concurrently, steel prices on European spot markets deteriorated dramatically. The reasons lay in the longstanding weakness of the European construction sector as the main customer of the steel industry on one hand and, on the other—and even more importantly—a massive increase in the imports of steel commodities from China, at a time when Europe is struggling with considerable overcapacity.
Up to now, voestalpine has only been marginally affected by this development due to its focus on premium products in both the energy and steel sectors and was able to largely compensate it by concentrating on other industrial segments and economic regions. This strategy will now become more difficult in the second half of the business year due to the more precarious economic situation in both of these industrial sectors since the end of the summer, despite the overall slight upward trend in Europe and a largely stable economic development in North America, as very little demand to speak of can be expected from other global regions.
Against this backdrop and from today’s vantage point, a softening of the earnings trend is looming for the third and fourth quarters of the current business year compared to the first half of the year. While operating result (EBITDA) and profit from operations (EBIT) for the year as a whole are still expected to be higher than the previous year’s figures (including non-recurring effects and changes in consolidation), the adjusted figures will be lower than those of the previous year in view of the increasingly challenging market environment.
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