Strong demand for the special steel used in tools and turbines helped drive up earnings at Austria’s Voestalpine, which reiterated it should see a healthy rise in full-year operating profit.The Linz-based maker of alloys used in cars, railways and pipelines said most sectors had shown robust demand as the general economy improved, though it warned that the global outlook was laced with risks.“We are still assuming that we will show a substantial increase in our operating result compared to the previous business year,” Chief Executive Wolfgang Eder said.“However, a significant risk factor is that the uneasy financial markets and the discussion surrounding national debt could have a negative effect on the real economy.”
Voestalpine said in May it would make more than 1 billion euros in earnings before interest and tax (EBIT) in 2011/12, topping the 985 million euros ($1.4 billion) from the previous year, thanks partly to an efficiency drive and cost cuts. Analysts expect 1.14 billion.
“Voestalpine remains our top pick in the depressed and cyclical carbon steel universe, and we confirm our “buy” rating,” UniCredit analysts wrote in a research note.
Voestalpine’s peers have also seen a gradual recovery since the end of 2008, when the $500 billion steel sector slumped.Germany’s ThyssenKrupp confirmed a key full-year profit target last week, while world No.1 steelmaker ArcelorMittal expects demand from China and the auto industry to help support second-half profits this year.However Voestalpine also echoed its rivals’ concerns about increased uncertainty in global markets. “The real economyis facing a highly volatile financial sector whose trend is being determined to a high degree by how quickly the major mature economies on both sides of the Atlantic.
From / Gulf Today