Salzgitter starts cutting costs amid weak steel market
Aug 12 (Reuters) -Salzgitter SZGG.DE said on Monday it had started to implement cost cutting measures across its businesses, after the tough steel market in Germany led to a net loss in the second quarter.
"The year 2024 is proving to be one of the most challenging for Germany's steel industry in decades," CEO Gunnar Groebler said in a statement.
The German steel maker's net result swung to a loss of 33.5 million euros ($36.6 million) in the second quarter of the year, compared to a profit of 19.7 million last year.
"2024 appears to be a lost year from an operating standpoint," Groebler added.
The cost reductions will include measures in budgets, personnel costs and maintenance, Chief Financial Officer Birgit Potrafki said during a conference call.
"I do not expect job cuts," said Baader Helvea analyst Christian Obst, noting the company still has a conservative approach to its balance sheet.
Last month, Salzgitter cut its core profit (EBITDA) forecast for the second time this year, less than two weeks after it pre-announced its second-quarter results, including a 23% drop in the metric.
The company's shares have fallen 45% so far this year. They were flat on Monday, as the quarterly results were largely known.
German peer Thyssenkrupp TKAG.DE also cut its outlook in July, citing weak demand for its products that include steel, submarines and car parts.
($1 = 0.9159 euros)
Reporting by Isabel Demetz and Marleen Kaesebier in Gdansk; editing by Milla Nissi
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