Business News
Steelmaker voestalpine makes quarterly loss as demand stays weak
Aug 20, 2009, 7:40 GMT
Vienna - Austrian steelmaker voestalpine AG on Thursday reported a net loss of 48 million euros (68 million dollars) in the April-June business quarter, as demand in the automotive sector and other key industries remained weak.
In 2008, before the global economic and financial crisis fully hit Europe, the company had a profit of 240 million euros in its first quarter, which for voestalpine runs from April through June.
As automotive production in Europe has fallen by 30 per cent below last year's levels so far this year - and construction, machinery and plant production experienced even bigger drops - revenue decreased by 36 per cent to 2.07 billion euros in the company's first quarter.
Besides lower sales, write-downs on raw material costs contributed to voestalpine's operating loss of 24 million euros in the quarter.
Since last September, the Linz-based company has reduced its headcount by 4,100 workers, or 8.8 per cent of the workforce. More than 11,000 employees have been put on reduced working hours, a number that the management is planning to increase to 16,400.
As demand volumes and prices have stabilized since the end of June, voestalpine said it hoped to make an operating profit in the 2009/10 business cycle.
However, the steelmaker's management board said it was sceptical about economic forecasts: 'In this industry, knowledge seems to be mutating more and more toward faith and hope - something that, as we know, is not of much help to enterprises.'
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