The diesel fuel voestalpine gives a thin
LINZ / VIENNA. Operating profit declined by almost a fifth in the first half of the year – car manufacturers slow down new car production.
Car manufacturers are currently installing fewer Voestalpine profiles.
Just two weeks ago, Voestalpine CEO Wolfgang Eder announced a profit warning. The annual result will not be over, but less than a billion euros. He confirmed this on yesterday's semi-annual press conference in Vienna.
In addition to the costs of blast furnace rehabilitation and international trade conflicts (see related articles), the Group is also suffering from the deteriorating car market. Letters to shareholders mention "short and sometimes significant reductions" in the orders. It has cost many of the two divisions that deliver to the automotive industry.
Eder said lower orders had reduced capacity utilization to a normal level. Before production went to the limit. He assumes that European car manufacturers will use the time around year-end as a valve to further reduce capacity. "It will be exciting," said Eder. He expects that the Plant Law Act tends to be longer.
Uncertain prospects were also the topic of Upper Austria's car dealerships at yesterday's industry meeting. The automotive industry 2018 in the car cluster took place in Voestalpine Stahlwelt. The backwaters that Volkswagen causes with exhaust emissions testing (WLTP) of many diesel models "directly affects our suppliers," confirms cluster chief Wolfgang Komatz. 90 percent of the production of auto parts is exported, 60 percent of that in the German market. But: "It's a scent, not a burglary," agrees the industry.
In addition, yesterday's event broke out that the announcement that the premium car maker BMW, represented in Upper Austria, with the largest engine manufacturing in the Group, recorded a surprisingly strong profit decline. In the core Automotive division, earnings before interest and taxes (EBIT) declined by 47 percent to EUR 930 million in the third quarter.
Suppliers can hardly plan. For example, an Austrian entrepreneur reports that during the first quarter of 2019 he should adapt to deliveries of between 6,000 and 300,000 units for a certain proportion. This is also unusual for short-term car processors – who do not always handle their suppliers well. "We are dealing with unpredictable model shifts and get reliable statements from all manufacturers," says the chief executive of the listed Hörschinger car dealer Polytec, Markus Huemer.
Polytec gain minus 28 percent
About a quarter of the production of cars on Polytec goes to VW. But: "It's not a general economic problem, but it's the diesel displacements." The diesel crisis is already evident in the figures for the first nine months: Consolidated profit after tax decreased by 28.4 percent to 22.2 million euro in the first three quarters.
Wolfgang Rathner, CEO of Autozulieferer Fill the Gurten, Do not Know the Diesel Crisis: The tool machine had for a long time increased its way from the classic drive line supplier to lightweight designs and e-vehicles.
Linz chief executive Heinz Hollerweger (Seat) talks about a pronounced dunk in the automotive industry. "It's painful, but it can be healing, and the automated companies still make good money."
A fire and the expensive renovation
The first half of the voestalpine went well, but not as well as predicted. Despite record sales of 6.7 billion euros (plus six percent), operating profit (EBIT) decreased by 18 percent. The Voestalpine share was once again one of the losers on the Vienna Stock Exchange.
At the half-year press conference, CEO Wolfgang Eder noted the reasons: the repair cost of the blast furnace in the result, 150 million euros. This, unlike originally planned, can only be compensated by one third.
For the first time, the effects of global trade conflicts with the USA are noticeable, for example, because less stainless steel from the Swedish Uddeholm factory is being processed in China. In total, such effects cost 30 to 40 million euros in profit.
The sponge mill in Texas should deliver between 2.5 and 4 million euros in operating profit per year. Now, four weeks of production are missing due to floods and a gas explosion. Detail on the edge: Only one crane had to wait for six days. "In Linz, it would have been a lot faster to repair," says Eder.
The introduction of new car equipment in the United States also costs more than planned. Add this turmoil to the European automotive industry
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