Steel and metal products manufacturer Klöckner & Co (KCO) Wednesday reported a loss for 2012, compared to a profit last year, amid a weak Europe and price pressure on products. Looking ahead, the company sees higher Earnings Before Interest, Tax, Depreciation and Amortization in 2013.
For the year, the firm reported a net loss attributable to shareholders of 195 million euros ($254.6 million), compared to a profit of 12 million euros last year.
The latest results included 77 million euros in restructuring expenditure and 55 million euros in impairments. Excluding special items, net loss was 83 million euros, while it was a profit of 20 million euros last year.
Annual sales rose to 7.388 billion euros from 7.095 billion euros, largely due to the acquisition of Macsteel Service Centers USA and strong organic growth in the U.S. Turnover advanced 6.1 percent to 7.1 million tons.
Operating income, which is Earnings Before Interest, Tax, Depreciation and Amortization, or EBITDA, before restructuring expenditure, was 139 million euros, down 39 percent from the prior year,
mainly due to decline in demand in Europe and ongoing price pressure on steel products from the second quarter.
Gross profit margin fell 1.1 percentage points to 17.4 percent due to ongoing price pressure.
For the fourth quarter, net loss attributable to shareholders of the company was 120 million euros, sharply wider than the 27 million euros loss reported in the prior year.
Sales for the quarter dropped to 1.633 billion euros from 1.739 billion euros in the prior year.
According to the company, its restructuring and optimization program contributed 51 million euros to EBITDA since it started in September 2011 and 46 million euros of this came in fiscal 2012.
Gisbert Rühl, Chairman of the Management Board, said, "We responded in a timely fashion to yet another steep drop in steel demand in Europe by significantly stepping up our restructuring program. More than two thirds of the measures are already implemented, so we can start into the new year with a tailwind despite the ongoing challenges in the market environment."
The company expects EBITDA to increase in 2013 to around 200 million euros mainly due to the 60 million euros earnings contribution from restructuring actions. The firm also expects to generate net income and again a positive cash flow in the year.
For 2013, Klöckner expects that turnover and sales will remain at around the previous year's level due to additional growth in the U.S. and despite the relinquishment of turnover volumes in Europe through the restructuring.
The stock added 4.15 percent on Tuesday to settle at 11.42 euros.
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