For a second time, Voestalpine lowered its FY 2019 earnings expectations, this time to €1.2bn ($1.31bn), as a soft European economy, low steel prices and auto sector demand impacted revenue through the first nine months of its fiscal. 

 

The company first lowered its earnings outlook while announcing its H1 2019 results in November 2019 to €1.3bn.

 

The Austrian company indicated that many factors impacted volumes and sales in the first nine months of the year, including economic downturns in some of key markets, impairment losses, and restructuring provisions. These, along with the coronavirus outbreak in China—where Voestalpine operates nine facilities—are expected to negatively impact the company’s 2019 annual revenue, profits, and Q4 earnings.

 

However, its consumer businesses, which include railways, aerospace, storage systems and welding technology, have been stable and contributed to the company’s revenue.   

 

For the first three quarters of 2019, the company reported a 3.8pc decrease in revenue to €9.6bn from €9.9bn in 2018. Its EBITDA during the period fell 24.2pc to €837mn due to low delivery volumes and restructuring expenses.

 

The company reported a net loss of €160mn from the impact of trade conflicts, a weak European economy, and low demand for its products from a slowing automotive sector. Low steel prices resulting from rising iron ore prices also put pressure on the company’s profitability during Q3 and the first nine months of the financial year.

 

€1 = US$1.097 (as on February 6, 2020)

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