Klöckner Sees Record-Setting Profits Thanks to Surging Sales, Prices

Following profits of €85 million ($102.2 million) in Q1, the second-quarter results surged to €215 million ($252 million) on total sales of €1.8 billion ($2.1 billion), 57.8% above the year-ago quarter.

Shipments in the second quarter of this year were about equal to Q1 at 1.3 million tons, but up 21.0% from 1.1 million tons in the second quarter of 2020.

The reason: a “strong positive price dynamic,” especially in the U.S., and in Europe as well, Klöckner said.

Klöckner’s U.S. segment posted net earnings of €134 million ($157 million) in the second quarter, a big jump from Q1’s results of €75 million ($90.2 million), and a complete reversal from pandemic-driven net-zero earnings in the year-ago quarter. U.S. sales were up 77% in Q2 year on year at €845 million ($990 million) on shipments of 633,000 tons, a 20.2% increase from the second quarter of 2020.

Klöckner said the company is poised and well positioned for strategic growth in its U.S. operations. It sees investments in the U.S. infrastructure as a significant growth opportunity to strengthen its partnership with Nucor.

Currently, Klöckner is expanding the footprint of its facility located on the campus of Nucor’s Berkeley, S.C., mill. The facility will be operational in Q1 2022 with enhanced processing capabilities to serve a larger customer base. Additionally, Klöckner is planning a new plate processing facility that will be closely aligned with Nucor’s new plate mill currently under construction in Brandenburg, Ky. Location for this new facility is still under consideration, the company said.

Digital sales also grew for the German-based service center, as roughly 45% of its sales in the second quarter came via digital channels, up from 38% in the same quarter last year, Klöckner said.

The company’s digital assistant, kloeckner.i, which is driven by artificial intelligence, has processed more than €500 million ($586 million) in sales year-to-date. And XOM Materials, Klöckner’s electronic procurement platform, sold products worth more than €370 million ($433.5 million) year-to-date, the company said.

“Our improved operating lineup is delivering results,” Klöckner CEO Guido Kerkhoff said. “This allows us to benefit particularly strongly right now from the positive market environment… as well as the pooling of our digital capabilities in kloeckner.i, as we have set an important initial course to further consolidate and extend our excellent position, also in a changed market environment.”

By David Schollaert, David@SteelMarketUpdate.com