Salzgitter Slumps in Frankfurt on ‘Challenging’ 2012 Outlook
Salzgitter AG (SZG) (SZG), the German steelmaker that posted a fourfold gain in full-year profit today, fell the most in four months in Frankfurt trading after saying Europe’s debt crisis will make it “challenging” to match 2011 results.
Salzgitter (SZG) sank 5.4 percent to close at 42.88 euros. That’s the steepest one-day slump since Nov. 1 and the second-biggest decline in the seven-member Bloomberg Europe Steel Index. (BESTEEL) Pretax earnings rose to 201.6 million euros ($266.7 million) in 2011 from 48.9 million euros a year earlier, it said in a statement.
“Delivering a repeat of the previous year’s results will be challenging, as the start to the new year appears to be marked by dampening effects on the course of business in the Steel and Tubes divisions,” the company said. Sales will remain “stable at the minimum” this year and “positive” earnings before tax can be achieved, it said.
Steelmakers are battling to bolster earnings as cooling economic growth in China and Europe sap demand. ArcelorMittal (MT), the biggest producer, posted its lowest quarterly profit in two years last month and ThyssenKrupp AG (TKA) said Feb. 14 it was unable to give a “reliable” outlook given the sovereign debt crisis.
“Making reliable statements on the development of the business situation in the coming quarters is as impossible as giving a sound, detailed earnings forecast for the Salzgitter Group,” the company said in today’s statement.
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