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The effects of the pandemic are causing operational problems for the voestalpine technology group. However, Wolfgang Eder’s legacy weighs equally on the shoulders of his successor Herbert Eibensteiner. Due to special write-offs for the Texas plant in Corpus Christi, the first half 2020/21 result (as of September 30) fell deeply into the red.
Operating income before interest and taxes (EBIT) went from 230 million euros in the previous year to less than 215 million euros in the first six months of the current year. After taxes, the loss is 276 million euros. At the end of October, the board announced that it would make a special write-down of around 200 million euros. Financial director Robert Ottel specified it in yesterday’s semi-annual balance: 168 million euros are due to special devaluations for the Corpus Christi plant. This means that the prestigious project of the Wolfgang Eder era has already been written off for more than 300 million euros and now only has 448 million euros on the books. “The special depreciation for Texas hurts. The project was decided in 2012, since then the market has changed,” said voestalpine boss Herbert Eibensteiner. However, he adds that the sponge iron plant should play a role in the group’s path to CO2 reduction.
The current crisis has also demanded a lot from the voestalpine team. Sales collapsed, mainly driven by volume, by a fifth to 5.1 billion euros. By comparison, the number of employees dropped 6.5 percent to 47,917. Thanks to reduced-time work and reduced vacations, time credits, and leasing staff, a lot has been avoided. In Austria, the completions concern the Styrian plant in Kindberg, where steel pipes are manufactured for the oil and gas industry. Along with aviation, it is the area most affected by the economic crisis.
The auto industry, one of voestalpine’s most important sales markets, recovered quickly after the spring accident. From a geographical point of view, China regressed more quickly: “The central government rigorously contained the pandemic and then boosted the economy with measures,” Eibensteiner said.
Savings were made across the group, including investments. They were historically low by 245 million euros in the first half of the year, which could not be a permanent condition, Ottel emphasized: “It is not sustainable to invest below regular depreciation.” The latter were around 400 million euros. The CFO highlighted the group’s financial strength: as debts fell more dramatically than equity in the first half of the year, the debt ratio dropped from 75 to 66 percent. The operating cash flow went from 200 to 563 million euros.
However, the board of directors made one thing clear yesterday: The bottom line for the year as a whole is the second consecutive year of losses. (South Dakota)
- 5.1 billion euros was the turnover of Voest in the first half of the year. That is a fifth or 1.4 billion euros less than the previous year.
- -215 million euros make up the operating result (EBIT), after 230 million euros in the first half of 2019/20.
- 2,500 employees today they are still working part-time at the Group’s plants. At the peak of spring it was 10,000.
- 245 million euros voestalpine has invested. Therefore, investments were lower than depreciation in the first half of the year.
