Klöckner & Co. expects steel prices to come down later this year after a sharp rise in Q1, the company said in its 4Q earnings report.
“Despite the rise in steel prices at the beginning of 2023, Klöckner & Co. expects a lower price level overall compared to the prior-year period and correspondingly lower sales,” Klöckner said.
The Duisburg, Germany-based service center group, which has a large presence in the US, noted it expects the global steel market will increasingly normalize in 2023.
For 4Q 2022, Klöckner & Co. swung to a net loss of €42 million ($45 million) vs. net income of €139 million a year earlier on sales that slipped 2% to €1.99 billion.
For the full year 2022, net income fell 59% to €253 million despite a 26% increase in year-over-year sales in FY2022 to €9.38 billion.
“Despite the challenging macroeconomic environment, we continued to successfully execute our corporate strategy in fiscal-year 2022,” Klöckner CEO Guido Kerkhoff said in a statement.
“We made significant progress toward our goal of becoming the leading one-stop shop for steel, other materials, equipment and processing services in Europe and the Americas,” he added.
The company highlighted the December buy of National Material of Mexico (NMM) by US subsidiary Kloeckner Metals Corp. (KMC).
Klöckner said the acquisition strengthens its position in steel and metals distribution and the steel service business in North America.
“NMM and KMC notably complement each other in terms of regional coverage, customer segments and in view of NMM’s strong position in the automotive sector,” the company said.
Klöckner added that the deal also represented an opportunity to enter the electrical steel market, “which has considerable growth potential.”
The acquisition is expected to close before summer 2023 pending necessary antitrust approvals.
By Ethan Bernard, firstname.lastname@example.org
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