Salzgitter issues profit warning, blaming sluggish German economy
Updates share, adds quotes from statement from paragraph 4, Thyssenkrupp background
BERLIN, July 30 (Reuters) -German steelmaker Salzgitter SZGG.DE revised down its earnings outlook for the year on Tuesday, pointing to delayed infrastructure projects due to high energy and import costs as the German economy languishes in a downturn.
The company now expects earnings before interest, taxes, depreciation, and amortization (EBITDA) of between 400 million euros ($433.40 million) and 500 million euros, down from a previous target range of between 550 million and 625 million.
Sales are seen slightly lower at 10 billion euros this year, versus a previous forecastfor 10.5 billion, while the company's return on capital employed (ROCE) is expected to be "discernibly lower year on year", Salzgitter said in a statement.
The company had previously expected ROCE marginally below the prior year's level.
"Germany's economic recovery is still slow to materialize," the country's second-largest steelmaker said in a statement released hours after data for the second quarter showed a surprise contraction for Europe's largest economy.
"Uncertainty currently prevails about a trend reversal after the summer," the company added.
Salzgitter shares fell by as much as 5.4% after the statement but then recovered some of their losses, trading 2.2% lower at 1028 GMT.
Last week, German conglomerate Thyssenkrupp TKAG.DE cut its 2024 outlook , citing weak demand for its products, which include steel, submarines and car parts.
($1 = 0.9229 euros)
Reporting by Rachel More, editing by Kirsti Knolle
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