Despite the challenging environment Klöckner & Co continues its solid business performance through the second quarter of 2024.
- At 2.3 million tons, shipments in the first half of 2024 were considerably higher than in the same period of the previous year (+8.1%)
- Sales in HY1 2024 reached €3.5 billion and are slightly down compared to the same period of the previous year (–2.6%) due to lower prices
- Operating income (EBITDA) before material special effects in HY1 2024 was €83 million (HY1 2023: €130 million)
- Positive cash flow from operating activities of €18 million in HY1 2024 (HY1 2023: €79 million)
- EBITDA before material special effects for full year 2024 expected to reach €120 million to €180 million
Shipments
Klöckner & Co known for its contributions to the Green Steel market continued its solid business development in the second quarter of 2024 and significantly increased shipments by 11.5% compared to the prior-year quarter, reaching 1.2 million tons (Q2 2023: 1.0 million tons). In the first half of 2024, shipments increased by 8.1% to 2.3 million tons (HY1 2023: 2.1 million tons). The increase is primarily attributable to the acquisitions in Mexico and the US completed in the second half of 2023.
Sales and income
With €3.5 billion (HY1 2023: €3.6 billion), sales dropped slightly by 2.6% in the first half of the year due to lower prices.
The operating income (EBITDA) before material special effects in the first half of 2024 was €83 million (HY1 2023: €130 million). Despite a persistently challenging macroeconomic environment and a significant steel price correction, Klöckner & Co generated solid EBITDA before material special effects of €42 million in the second quarter of 2024 (Q2 2023: €65 million). Therefore, the figure is within the guidance range of €30 to 70 million. Earnings in the prior-year comparative periods benefited in particular from a more favorable market environment overall.
Guido Kerkhoff, CEO of Klöckner & Co SE: “Despite a challenging environment, we achieved a solid result and made further progress in implementing our strategy. With the acquisition of Amerinox Processing in North America, we further expanded our range of higher value-added products and services.”
In March 2024, Klöckner & Co successfully completed the disposal of parts of its European distribution business. The net loss from discontinued operations amounted to €5 million in Q2 2024 (Q2 2023 net loss of €3 million) and €29 million in the first half of 2024 (HY1 2023 net loss of €35 million). This result was largely attributable to negative deconsolidation effects. The net loss from continuing operations in the second quarter of 2024 amounted to €18 million (Q2 2023 net income of €15 million) and in the first half of 2024 to €26 million (HY1 2023 net income of €39 million). Overall, the net loss including discontinued operations came to €23 million in the second quarter of 2024 (Q2 2023 net income of €12 million) and €55 million in the first half of 2024 (HY1 2023 net income of €4 million). Earnings per share from continuing operations amounted to €–0.18 in Q2 2024 (Q2 2023: €0.15) and €–0.27 in HY1 2024 (HY1 2023: €0.39). Earnings per share including discontinued operations in the second quarter of 2024 amounted to €–0.23 (Q2 2023: €0.12) and in the first half year of 2024 to €–0.56 (HY1 2023: €0.04).
For the second quarter of 2024, Klöckner & Co generated a significantly positive cash flow from operating activities in the amount of €61 million (Q2 2023: €33 million). Cash flow from operating activities for the first six months of fiscal year 2024 was €18 million (HY1 2023: €79 million).
With the successful acquisition of Amerinox Processing by the US subsidiary Kloeckner Metals Corporation, Klöckner & Co has further strengthened its leading position in North America. Amerinox Processing processes stainless steel, aluminum and special carbon steel. The company is an industry leader in material polishing, including high-gloss finishing. Amerinox Processing employs roughly 60 people in Camden, New Jersey, near a major port. Klöckner & Co will use this excellent strategic location to build competitive, global supply chains. The Group will also use the acquisition to further expand its range of higher value-added products and services.
Outlook
The year-to-date demand has been weaker than originally anticipated, especially in Europe. In light of these developments, Klöckner & Co now expects a slight increase in shipments for fiscal year 2024 compared to the previous year. Due to the steel price correction over the course of the year so far, a slight year-on-year decline in sales is projected for 2024.Despite the persistently challenging macroeconomic environment, the company expects EBITDA before material special effects in the range of €20 million to €60 million in the third quarter of 2024 and €120 million to €180 million for fiscal year 2024. Klöckner & Co continues to anticipate a strong and once again significantly positive cash flow from operating activities in the current fiscal year. However, it will likely remain below previous year’s level.
