Salzgitter Group H1 Performance Depends on The European Structural Crisis Steel Industry

Germany-based steelmaker Salzgitter Group has announced that in the first half of the current year its performance was largely determined by the structural crisis in the European steel industry. Severe competition resulting from scarce demand, which in turn has contributed to ongoing capacity underutilization of numerous producers in southern Europe, pushed the selling prices achievable for most rolled steel products below the manufacturing costs. Against this backdrop, Salzgitter's steel division reported a high loss owing primarily to impairment of the assets of its subsidiary Peiner Träger GmbH. Additionally, Salzgitter plans to cut 1,500 jobs by the end of 2015.
 
In the second quarter, Salzgitter posted a net loss of €298.6 million, compared to a net loss of €7 million in the corresponding quarter of 2012, while the company registered a net loss of €315.2 million in the first half of 2013, compared to a net loss of €22.54 million in the same period of the previous year.
 
Salzgitter's sales revenues amounted to €2.53 billion in the second quarter, down 8.45 percent year on year, while in the first half the company's sales revenues decreased by 7.08 percent year on year to €5 billion, mainly attributable to the unfavorable selling price trend for rolled steel products.
 
In the second quarter, Salzgitter produced 1.85 million mt of crude steel, decreasing by 4.5 percent, while the crude steel output for the first half amounted to 3.78 million mt, down two percent, both year on year.
 
According to Salzgitter, there is still no sign of a major economic recovery in the euro zone. Accordingly, the general environment in which the company conducts its business is unlikely to improve in the months ahead. For this reason, Salzgitter has given priority to focusing on implementing the projects that aim to safeguard the medium to long-term competitiveness of the company.