Kloeckner’s shipments declined by 27.6pc to 1.1mn mt in Q2 2020 from 1.5mn mt during the same quarter a year ago because of the fallout from COVID-19-related lockdown measures.
Kloeckner’s H2 outlook includes a considerable increase in shipments and sales, and it forecasts an EBITDA of €15-25mn ($18-39mn). For calendar 2020, shipments and sales are anticipated to fall short by 20pc compared to 2019, and the company’s EBITDA for the year is expected in the range of €50-70mn.
COVID-19 accelerated Project Surtsey, which involves restructuring and optimizing digital infrastructure at the expense of up to 1,200 employees and 19 of the company’s sites, while increasing digital sales by over 50pc. The project started in Q1 2020 and is expected to finish by Q1 2021.
Sales declined by 30.4pc to €1.2bn in Q2 2020 compared to €1.7bn in the same quarter last year, driven by lower volumes sold at lower prices. In H1 2020, sales slipped by 22.6pc on an annual basis to €2.6bn.
The company was affected by weak demand in the automotive, machinery, and energy sectors in Germany and the US. Digital sales increased by 9pc, as Q2 saw 38pc of total sales processed via the digital platform against 29pc in Q2 2019.
Kloeckner’s gross profits decreased by 25.4pc to €226mn in Q2 2020 from €304mn in Q2 2019, while its EBITDA plummeted by 78.9pc to €11mn in Q2 2020 from €51mn in Q2 2019. The firm’s gross profit margin increased by 1.2pc from 18.1pc in Q2 2019 to 19.3pc last quarter.
COVID-19’s impact on the company was softened by improved digital capabilities, reduced operating overhead and raw material costs, and better-than-expected performance in construction. Operating expenses declined because of layoffs and lower shipping costs on lower output.