The economies of some regions were subject to increasingly fragile growth momentum toward the end of the first six-month period of the business year 2018/19; in Europe, this development was increasingly intensified by the growing price volatility in the energy sector and not least with respect to CO2 emissions certificates.
Currently, however, the accumulating negative effects from distortions of the international trade flows as a result of the protectionist trade policies of a growing number of countries are giving rise to macroeconomic concerns, as is weakening demand in individual industrial segments and economies. Hence the “Worldwide Harmonized Light Vehicle Test Procedure” (WLTP), which went into effect in Europe on September 1, 2018, continues to create considerable uncertainty among automotive manufacturers and potential buyers alike—with the corresponding effects on the markets. Important regional developments outside of the European Union include the recent noticeable slowdown in China’s economic growth.
Operationally speaking, during the summer Europe was confronted with considerable additional difficulties in that a drought caused the water levels of rivers to drop so low that practically all navigation routes for ships were, and in part still are, faced with increasing logistical challenges that affect both incoming and outgoing freight. voestalpine, for its part, has had to and must still contend with additional reductions in earnings owing to both start-up costs in excess of budgeted costs at the Group’s North American automotive sites and unplanned production stoppages at the HBI facility in Texas, USA, due to flooding and a gas pipe rupture.
As already described in the ad hoc report dated October 24, 2018 (“voestalpine with second quarter below market expectations, adjustment of earnings expectations for business year 2018/19”): Contrary to expectations at the start of the current business year, it will not be possible against this backdrop and given the available numbers for the first half of the current business year to repeat the record results that were achieved in 2017/18, due especially to the reduction in earnings from the complete overhaul of the Group’s largest blast furnace during the summer months. Given these internal and external facts, it will no longer be possible to largely offset this negative effect through other positive effects, as initially planned.
Based on the current development for the business year 2018/19, therefore, we expect a profit from operations (EBIT) of just under EUR one billion and an operating result (EBITDA) of just under EUR 1.8 billion.