Development of the voestalpine Share
The breakthrough in vaccines has caused the COVID-19 issue which, just last year, had dominated developments in the capital markets to recede into the background. Highly volatile price fluctuations in the steel and raw materials markets, sharp increases in energy costs, and disruptions in supply chains are among the many factors that affected especially steel industry stocks in the business year 2021/22.
The voestalpine share still moved laterally at the start of the reporting period. Initially, it was unable to keep pace with the upward revisions of earnings forecasts despite the intensifying rebound in key global economies. Investors’ confidence in the company’s share did not solidify until the publication of both the results for the first quarter of the business year 2021/22, which surpassed analysts’ expectations, and the Group’s improved guidance on its operating results for the entire business year. In mid-August 2021, the share even exceeded the EUR 40 mark.
During the Northern summer of 2021, semiconductor supply chain problems intensified in the automotive industry. As the latter accounts for just under one third of total revenue, this segment’s performance is particularly relevant to the Group’s earnings. Later in the summer, the financial difficulties of the second-largest Chinese real estate group, Evergrande, dominated international economic news. Fears that its looming insolvency might trigger a chain reaction and weaken the global economy unsettled investors. Add to that the sharp increases in energy prices in the European spot markets along with the resulting adverse effects on the costs of energy-intensive production plants. During the Northern fall, however, the voestalpine share stabilized at just over EUR 30 despite the unfavorable environment. Two factors were key to this development: For one, the economic environment of key customer segments except the automotive industry turned out to be robust. For another, following a short downward trend steel prices stabilized at a high level, as before.
The start of calendar year 2022 saw a rebound in automotive demand, only to be followed by rising fears of inflation owing to energy prices that remained high. The start of Russia’s invasion of Ukraine at the end of February set in motion yet another threat scenario. This intensified the volatility of the voestalpine share toward the end of the reporting period.
The voestalpine share closed at EUR 27.02 as of March 31, 2022, down from EUR 35.78 as of April 1, 2021, the start of the business year—a decline of 23.5%. The leading Austrian share index (ATX), the STOXX Index Europe, and the Dow Jones Industrial recorded slight gains in the same period.