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.

KloecknerAll 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

Michael Cowden is managing editor for Steel Market Update. Cowden has covered the steel industry since 2007. He specializes in flat-rolled steel but has also reported on steel long products, steel pipe and tube, and aluminum. Before joining SMU, Cowden held reporting jobs at Fastmarkets AMM in Chicago, the Associated Press in Pittsburgh, and the Cambodia Daily in Phnom Penh. He has also worked as a copy editor and in marketing at the University of Chicago Press. Cowden has a BA in English from the University of Chicago and an MSJ journalism from Northwestern University’s Medill School of Journalism. Contact him at michael@steelmarketupdate.com or 724-759-7872.

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