German steel maker Salzgitter AG (SZGPY.PK,SZGPF.PK) Wednesday reported a loss for full-year 2012, citing an extremely challenging steel market. However, the Group's external sales grew 6 percent benefited mainly by considerable growth in international steel trading. The company noted that declining selling prices in the European steel market, compounded by high input materials and energy costs and temporary capacity underutilization in the Tubes Division, could not be compensated by the positive development of the Trading and Technology divisions and a gratifying profit contribution by the 25 % holding in Aurubis AG. For the full year 2012, Salzgitter posted a loss of 99.8 million euros, compared to a profit of 236 million euros in the previous year. Basic loss per share was 1.89 euros, compared with earnings of 4.31 euros per share last year. Results for the year included a non-cash deferred income tax expenses of 62.3 million euros due to revaluation of tax loss carryforwards capitalized to date.
Loss before tax was 29.4 million euros, as against a profit of 201.6 million euros in the prior year, which included risk provisions, impairment and negative effects from reporting-date related market valuations.
The Group's external sales grew 6 percent to 10.4 billion euros, helped mainly by considerable growth in international steel trading. Trading division sales increased to 4.65 billion euros from 3.90 billion euros a year earlier.
In Steel Division, higher shipment volume was unable to fully offset the impact of lower average selling prices, and external sales declined to 2.65 billion euros from 2.74 billion euros in the preceding year. Steel tubes segment's external sales were 1.56 billion euros, down from 1.69 billion euros a year earlier.
Assuming that general conditions do not deteriorate further, the Group expects stable sales in 2013 and pre-tax earnings in the lower double-digit million euro range. Further, additional effects are anticipated from implementation of the 'Salzgitter AG 2015' Group project.
Salzgitter added that the weak and hardly reliable economic forecasts for Germany and Europe hamper providing a valid and detailed guidance. On Frankfurt's Xetra, the shares are currently trading at 35.31 euros, up 0.83 percent.
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