Kloeckner Accelerates Job Cuts as Crisis Curbs Steel Demand
Kloeckner & Co. SE, Europe’s largest independent steel trader, stepped up plans to cut jobs after lowering its profit outlook for the second time this year as the sovereign debt crisis weakened demand.
The company will eliminate in excess of 1,800 posts, equivalent to more than 16 percent of the workforce, compared with an earlier target of 1,300.
“We don’t see any growth impulses at all for Europe in the next year,” Chief Executive Officer Gisbert Ruehl said today on a conference call.
Kloeckner expects full-year earnings before interest, taxes, depreciation and amortization of 130 million euros to 140 million euros ($167 million to $180 million), excluding restructuring costs of at least 40 million euros. That compared with Ebitda of 217 million euros a year earlier, the Duisburg, Germany-based company said in a statement.
So far, 800 jobs have already been cut. About 20 offices out of 290 have been shuttered, and 40 more closures will follow.
Kloeckner gained 3.2 percent and closed at a six-week high of 7.88 euros in Frankfurt trading.
Tumbling demand from the auto and construction industries has squeezed profit margins at European steel companies. Salzgitter AG (SZG), Germany’s second-largest steelmaker, cut its profit forecast on Nov. 5. ArcelorMittal (MT), the world’s largest producer, said last week that third-quarter Ebitda dropped 44 percent to $1.34 billion.
Third-quarter Ebitda at Kloeckner fell 49 percent to 19 million euros, missing the 21.3 million-euro average of 11 analyst estimates compiled by Bloomberg. The company seeks to increase Ebitda by an annual 150 million euros from 2014.
Kloeckner reported its fifth consecutive quarterly net loss, of 27 million euros, compared with 11 million euros a year earlier. The average estimate of eight analysts was for a net loss of 21.6 million euros.
Kloeckner on Aug. 8 had forecast Ebitda of about 170 million euros, excluding restructuring costs.
To contact the reporter on this story: Tino Andresen in Dusseldorf at firstname.lastname@example.org