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voestalpine: Barometer of the Austrian Metals Industry

valinz
March 1, 2010

Cautious optimtism as Austrian leader in customized high-quality and high-tech steel products and solutions returns to profitability

The industrial conglomerate voestalpine, a fully integrated global provider of specialty metals, is pleased to have returned to profitability in the third quarter of their 2009/2010 sales year. voestalpine CEO Wolfgang Eder expects the firm’s EBIT (earnings before interest and tax) to come in somewhere in the three-digit million Euro range, while the net profit is expected to be "in the high double-digit million-Euro area”. This comes after five consecutive quarters of declining sales. He cites the most significant turnaround as being in the firm´s stainless steel business, which usually has a four to six month lag to the overall economy.

Eder has a cautiously optimistic tone for future economic devepment. The company reduced its staff cost by 15% since the beginning of the crisis in September 2008 and plans to end its short-term work policy within the first six months of the year. "But we will be very cautious when it comes to adding more people to the core workforce," Eder comments. To complicate matters, Eder also anticipates significant price increases for iron ore (30% to 40%) and coal (up to 50%) in April, and does not expect his firm to make any major investment decisions over the next couple of years.

Despite continued market volatility, Eder sees clear signs of a market recovery and growing demand in the US and Europe. It should be noted that voestalpine focuses on highly specialized products, which tend to have more stable markets than general commodity goods.  

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