Service Centers
Klöckner swings to Q2 loss, sees '24 sales decline on weak steel tags
Written by Ethan Bernard
August 6, 2024
Klöckner & Co. swung to a loss in the second quarter. And the company expects a decline in sales for 2024 because of the drop in steel prices.
The Duisburg, Germany-based service center group reported a net loss (attributable to shareholders of continuing operations) of €23 million (USD$25.2 million) in the quarter ended June 30 vs. net income of €12 million a year earlier on sales that increased 0.6% to €1.77 billion (USD$1.94 billion).
The company recorded shipments of 1.2 million tons in Q2’24, up 11.5% from the year-ago quarter.
“Despite a challenging environment, we achieved a solid result and made further progress in implementing our strategy,” Guido Kerkhoff, CEO of Klöckner, said in a statement on Aug. 1.
“With the acquisition of Amerinox Processing in North America, we further expanded our range of higher value-added products and services,” he added.
Klöckner announced the acquisition of full-range stainless steel and aluminum toll processor Amerinox Processing’s Camden, N.J., location last month.
The company said the purchase by its US subsidiary, Kloeckner Metals Corp., strengthened its position in North America. Amerinox employs approximately ~60 people in Camden. Klöckner said it would use the company’s “strategic location to build competitive, global supply chains.”
Kloeckner Metals Americas
The Kloeckner Metals Americas segment logged sales of €1.05 billion (USD$1.15 billion), up from €930 million a year earlier. It posted Ebitda of €41 million (USD$44.9 million) in the quarter, down from €65 million in Q2’23. Shipments totaled 741,000 tons in Q2’24, up from 598,000 tons.
The company said the Metals Americas segment saw a significant correction in steel prices in 1H’24. Still, compared to Europe, the Americas segment benefited from better economic conditions overall, Klöckner said.
Note that Klöckner has a substantial North American presence through its Kloeckner Metals subsidiary, which is based in Roswell, Ga., and which has more than 55 branches in North America.
Outlook
Klöckner noted that year-to-date demand has been weaker than originally expected, especially in Europe. Still, the company expects a slight increase in shipments for fiscal year 2024 vs. fiscal 2023.
But the steel price correction means, “a slight year-on-year decline in sales is projected for 2024.”
Despite such lower prices and a tough macroeconomic environment, the company said it expects Ebitda before material special effects in the range of €20 million to €60 million in the third quarter of 2024 and of €120 million to €180 million for fiscal year 2024.
Ethan Bernard
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