European steelmaker voestalpine has raised its outlook for FY2020, ending on March 31, 2021, after coming off a strong Q3—its first quarter of reducing losses after four consecutive quarters.
Herbert Eibensteiner, voestalpine’s chairman, said in the company’s earnings report on Feb 9 that improved performance in some of its key market segments in Q3 FY2020 has enabled the group to raise its forecast for the rest of the fiscal.
That said, the company remains unclear on the effects of the COVID-19 pandemic and the recent lockdowns in Europe on steel consumption in the region. Yet, based on its performance of the past quarter and the positive results from its cost restructuring measures over the past three quarters, voestalpine has revised its projected EBITDA to €1bn ($1.21bn), which is in the upper range of its guidance.
In the first nine months of the fiscal, the company’s revenue fell by 16.8pc to €7.9bn against €9.5bn in the nine months of FY2019. The company attributed the decline to weak demand in the first quarter of the year owing to the COVID-19 pandemic.
Since then, voestalpine noted, demand in some of its key segments has improved considerably, especially in the automotive, construction and consumer goods industries. Steel demand in railway infrastructure has remained stable, though consumption in the aerospace and oil and gas industries is yet to recover. The Austrian company recently restarted its blast furnace at Donawitz to cater to improving demand.
The steelmaker’s EBITDA fell by 18.4pc in the nine months ended December 31, 2020, to €683mn from €837mn during the same prior-fiscal period, and gross loss increased by 13.7pc to €210.5mn from €185.2mn in the same time frame. Net loss, however, fell by 0.4pc to €159.3mn from €160mn during this period.
(€1= $1.21)