Voestalpine cuts profit outlook, hit by weak automotive market in Europe
Feb 12 (Reuters) - Austrian steelmaker voestalpine (VOES.VI), opens new tab cut its core profit outlook on Wednesday after the metric slumped by nearly a third in its fiscal third quarter largely due to weakness in Europe, especially in the automotive and construction sectors.
"Europe remained the most difficult market for voestalpine in the current business year," said the company that predominantly supplies steel to the automotive industry.
European carmakers have been struggling with weak demand and rising costs, with German automakers like Volkswagen facing, opens new tab increased competition in China from local automakers.
"Demand for volumes fell rapidly and sharply following the profit warnings issued by car manufacturers," voestalpine said about its steel division, the largest of four based on revenue.
It pointed particularly to continuing weak demand in Germany, and noted the price of steel in Europe had fallen continuously in the first nine months of the fiscal year that runs through March 2025.
The speciality steelmaker posted a 32% drop in its earnings before interest, taxes, depreciation and amortization (EBITDA) to 250.3 million euros ($259.2 million) in the third quarter, slightly below analysts' mean estimate of 258.8 million euros.
It lowered its annual EBITDA guidance to around 1.3 billion euros for the year, from around 1.4 billion euros previously.
Voestalpine sees no recovery in the automotive, construction, mechanical engineering or consumer goods sectors in Europe in the fourth quarter, aside from restocking in individual segments, it added.
Meanwhile, it sees a mixed outlook for the U.S., Mexico and Canada, which make up its second largest market by revenue.
"Exports to the USA are fraught with uncertainty due to the announced tariffs on steel products," voestalpine said, but added it expects its North American sites to benefit from good economic momentum.
U.S. President Donald Trump on Monday substantially raised tariffs on steel and aluminium imports to a flat 25%, a move that was condemned by the European Union, Mexico and Canada.
($1 = 0.9656 euros)
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