Klöckner: Surging Prices Boost Record Profits in Q3

Following profits of €215 million ($252 million) in Q2, the third-quarter net income surged to €540 million ($623 million) on total sales of €2.04 billion ($2.77 billion), or more than double year-ago sales results.

Shipments in the third quarter of this year were 1.19 million tons, 8.5% lower than Q2’s 1.30 million tons, and 4.1% below the 1.24 million tons shipped in the third quarter of 2020. Despite lower overall shipments sequentially and year on year, there is an “exceptionally positive price trend” in the U.S. and in Europe, Klöckner said.

“The fact that we are once again able to present record earnings shows that we have set the right strategic course,” said Guido Kerkhoff, Klöckner’s CEO. “We continue to work systematically to accommodate customer and societal needs. As a case in point, with our recent partnership with H2 Green Steel, we have secured early access to ‘green steel’ for our customers and are developing into a pioneer of the sustainable steel industry.”

Klöckner’s U.S. segment posted net earnings of €146 million ($169 million) in the third quarter, a 9.0% increase from second quarter results and a huge increase from a pandemic-driven €7 million ($8.1 million) in the third quarter of 2020. U.S. sales were up 95% in the third quarter year on year at €1.01 billion ($1.16 billion) on shipments of 609,000 tons, a1.7% increase from third-quarter 2020.

Klöckner said the company’s sales were driven by the U.S. market, which accounts for 40% of total sales. Flat products were 45% of sales. U.S. operations remain a strategic growth target, and Klöckner anticipates overall reginal growth of 8-12% in 2022.

Digital sales also grew. Roughly 46% of sales in the third quarter came via digital channels, up 4% from the same quarter last year, Klöckner said.

The company’s digital assistant, kloeckner.i, which is driven by artificial intelligence, has processed more than €750 million ($866 million) in sales year-to-date. And XOM Materials, Klöckner’s electronic procurement platform, accounted for 80% of total product sales year-to-date, the company said.

Klöckner & Co is one of the largest producer-independent distributors of steel and metal products in the world with a distribution and service network of around 140 locations in 13 countries.

By David Schollaert, David@SteelMarketUpdate.com