Service Centers

Klöckner loss widens in Q1 but sees brighter quarter ahead

May 8, 2024

Klöckner & Co. logged a wider net loss in the first quarter vs. Q1 last year, but the Duisburg, Germany-based service center group expects higher shipments and sales in the current quarter.

The company’s net loss attributable to its shareholders widened to €33 million (US$35 million) in the quarter ended March 31, compared with an €8 million loss a year earlier on sales that fell 6% to €1.74 billion (US$1.87 billion).

“We achieved a solid result at the beginning of the year and reached an important milestone when we completed the sale of parts of our European distribution business,” Guido Kerkhoff, CEO of Klöckner, said in a statement on Monday.

“We can now focus our resources on the profitable high-growth business operations in Europe and North America and continue to expand our position in these key markets,” he added.

The company said the overall macroeconomic environment remains “challenging.”

Kloeckner Metals Americas segment

The Kloeckner Metals Americas segment reported Q1 operating income of €43 million (US$46 million) before material special effects, down from €46 million in Q1’23.

Though steel prices in the US declined sharply during Q1, the company said “the gross profit margin over the quarter” was only slightly less than in the same period last year.

The segment’s Q1 shipments totaled 700,000 short tons (st), up from 600,000 st a year earlier. The company said this was mainly driven by acquisitions made last year. (These include Mexican service center group National Material of Mexico (NMM) last August and Sacramento, Calif.-based solar industry firm Sol Components in October.)

The higher shipments pushed total segment sales 11% higher relative to Q1’23, Klöckner said.

Following the purchase of NMM, the Kloeckner Metals US segment was renamed Kloeckner Metals Americas, the company said.

Klöckner has a large North American presence through its Kloeckner Metals Corp. subsidiary based in Roswell, Ga., with over 55 branches in the US and Mexico and more than 200 worldwide.

Outlook

The company expects a “considerable increase” in shipments and sales in the current quarter from Q1. Additionally, Klöckner is forecasting Ebitda before material special effects of €30-70 million in the next quarter.

Ethan Bernard

Ethan Bernard is managing editor for Steel Market Update. He previously worked for American Metal Market as a copy editor in the New York office for two years, starting in 2008. Later, he copy edited AMM’s monthly magazine on a freelance basis from 2015 until 2017. With experience in financial copywriting and textbook publishing, he holds a BA in Comparative Literature from UC Berkeley, and an MFA. in Creative Writing from New York University. He can be reached at ethan@steelmarketupdate.com or 724-759-7871.