Steel Mills
Klöckner Doubles Q1 Profit on Higher Prices, Predicts Strong Q2
Written by Michael Cowden
May 4, 2022
Klöckner & Co. SE reported first quarter profits that were double those a year ago thanks largely to higher prices.
The Duisburg, Germany-based service center, which has significant operations in the US, expects the good times to roll into the second quarter as well.
All told, Klöckner recorded net income of €172 million ($181.3 million) in the first quarter of 2022, up from €86 million ($90.7 million) in the first quarter of 2021 on sales that increased roughly 60% to €2.4 billion ($2.53 billion) over the same period.
“We once again generated strong earnings in the first quarter of the year,” Klöckner CEO Guido Kerkhoff said in a statement released along with earnings figures on Wednesday, May 4.
Klöckner remains optimistic about business conditions in the second quarter despite “the challenging economic environment.”
Germany is more exposed to supply chain disruptions stemming from the war in Ukraine than the US, notably when it comes to reliance on Russian oil and gas.
Klöckner expects “stable to slightly increasing shipments” in the second quarter of 2022 compared to the first quarter. The company also forecast a “considerable” increase in sales quarter-over-quarter on higher steel prices, “disciplined” inventory management, and a margin-over-volume strategy.
Also of note, Klöckner said Khaled Bagban took over management of all the company’s IT and digital activities on May 1, 2022. Bagban serves as Klöckner’s chief digital and information officer as well as CEO of kloeckner.i – positions that will make him responsible for the company’s digital transformation.
Founded in 2014, kloeckner.i is in intended to be a “digital one-stop-shop” for steel and other materials, according to the company’s website.
By Michael Cowden, Michael@SteelMarketUpdate.com
Michael Cowden
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