Company News, 2008-10-04, 08:00 PM
ThyssenKrupp performed very successfully in 2007/2008
Dr. Karl-Ulrich Köhler, Executive Board Member of ThyssenKrupp AG and Executive Board Chairman of ThyssenKrupp Steel AG, confirmed the earnings forecast for ThyssenKrupp AG, which had been raised in August. At the annual conference of the International Iron and Steel Institute (IISI) in Washington he said: “We are expecting sales in the region of €53 billion and earnings before taxes and nonrecurring items of more than €3.2 billion in fiscal year 2007/2008.”
The Steel segment, which is focused on premium carbon steel flat products, performed very successfully in a robust market environment, but will not match the record earnings of 2006/2007. The reasons for this lie in pre-operating costs for the major projects in Brazil and the USA and restructuring expenses at the metal forming operations.
“Demand for our products was exceptionally high. Although our production units were fully utilized we were unable to meet customer requirements in full for capacity reasons,” said Dr. Köhler. At more than 14.2 million tons, crude steel production at ThyssenKrupp Steel was slightly lower than the year before due to the relining of Schwelgern 1 blast furnace in the first quarter of 2008. However, the output of the ThyssenKrupp Steel meltshops increased slightly thanks to a number of optimization measures, including more intensive scrap use. Slabs again had to be bought in to ensure maximum utilization of hot-rolled capacities.
Despite the weaker global economy, the situation on the international steel markets 2008 was marked by continuing growth and full capacity utilization. The first half of the calendar year in particular was characterized by brisk global demand which came up against supply shortages in some cases. This trend was accompanied by steel price increases, albeit with significant regional differences. The highest price rises were in Asia, the lowest in Europe.
The price corrections were necessary as a result of the drastic rise in raw material and energy costs, which reached a level never previously registered. “The significant price increases for raw materials, which pushed the share of raw material costs in production costs per ton of hot-rolled strip to over 70 percent, coupled with the energy price rises created unforeseeable costs for us of more than €1 billion,” said Dr. Köhler. The cost increases could partially offset by positive earnings effects from ongoing efficiency programs and additional cost-reduction programs.
ThyssenKrupp Steel is confident about its prospects in the current fiscal year 2008/2009. This optimism is based on the fact that the forecasts for the global steel market remain favorable. Demand in particular from Asia, Latin America, the Middle East and the CIS will continue to grow at an above-average rate in the next few years and significantly impact the global market. In Europe, the NAFTA region and Japan, steel market growth will be more moderate given the deterioration in the general economic outlook. “Raw material prices have eased to a certain extent recently, but it remains to be seen how long this will last,” said Dr. Köhler.
This press release is also available on the internet at www.thyssenkrupp-steel.de