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Danieli Reports Results and Outlook for 2012-2013
02/28/2013 - As it reported its results for the first half of its fiscal year, Danieli said it anticipates demand for new steel plants to be lower in the next few years due to slower growth in steel demand. At the same time, it noted there will be increased demand for the restructuring and upgrading of existing plants.
Summary of results for the first six months
The Board of Directors has acknowledged the results of the Danieli Group for the first six months of 2012/2013 (period ended 31 December 2012), which are in line with forecasts.
The profit for the period shows that the Plant Making segment (manufacture of steelmaking plants and machines, including turnkey solutions) is in line with forecasts, down 5% over the period ended 31 December 2011.
The Steel Making segment (production and sale of special steels by the subsidiary Acciaierie Bertoli Safau S.p.A. (ABS) did not perform as well, feeling the effects of a consistent drop in demand in Europe and Italy, hence a 39% decline in sales However, the margins at ABS allowed the company to make a small profit, in spite of the sharp drop in sales.
The Group’s order book is stable at €3,297 million, with a slight increase over 31 June 2012.
Prospects for the Sector
World steel consumption is expected to grow by 2–3% per year for the next 5/7 years, half of the 6–7% of the last 5/6 years.
In particular, this growth is expected to take place in China, India and the countries of the Far East, decreasing slightly in Europe and increasing slightly in the Americas, Russia, the Middle East and North Africa.
It follows that the demand for new plants in the next few years will be lower than in the recent past. On the other hand, there will be increased demand for restructuring/upgrading of existing plants.
Summary of results by segment
Despite the fact that the economic scenario is still depressed, the economic goals stated by the Group at the beginning of the financial year will basically be confirmed. The Danieli Group’s investments have been approved, and this year they will mostly be completed.
Plant Making segment:
· Investment of €30 million in the Buttrio (UD) workshops, to be completed by the end of June 2013;
· New Danieli research center in Buttrio (UD), to be completed by the end of June 2013;
· Startup of the factory and engineering offices of Danieli India Ltd. (Chennai, India), March 2013;
· Startup of the factory and engineering offices of Danieli Volga (Russia), June 2013;
Steel Making Segment:
· Upgrading of the Sisak plant in Croatia, August 2013;
· Upgrading of the blooming/reversing mill at Cargnacco (UD), August 2013;
· Dimensional expansion and quality enhancement of products cast by Hercules at Cargnacco (UD), December 2013.
ABS’ investment in the innovative “rotoforge” plant is still pending due to the lack of guarantees on the availability of electrical energy in Italy, and because of the need for a more thorough examination of the macroeconomic prospects of the Italian and European target market.
Order Book
The Group’s order book is well diversified according to geographical area and product line and, for the period ended 31 December 2012, amounts to €3,297 million (of which € 149 million in the special steelmaking sector) compared to €3.225 million for the period ended 31 June 2012 (of which €173 million for special steels). The Group’s net financial position, which as of 31 December 2012, was €820.0 million (showing a decrease of €4.6 million over the figure of €824.6 million for the period ended 30 June 2012), will allow the Group to efficiently and independently finance its investments in the steelmaking segment in Italy and Croatia, and in the plantmaking segment in Italy, India, Russia, China, Thailand and Vietnam.
