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About two weeks ago, voestalpine alerted investors to earnings for the year, due to the interaction of several negative factors such as trade disputes, weakening of the auto sector, rising costs in North America and fire in Texas. Thanks to the rise in selling prices, the turnover rose by 5.2% to EUR 3.2 billion, despite a decrease in volumes in the second quarter. On the other hand, EBIT fell by nearly 40% to 156 million due to rising costs, particularly in the United States. The quarterly surplus amounts to only € 84 million, well below our estimates and consensus estimates.
EBITDA of just under 1.8 billion euros complements the earnings outlook for consolidated EBIT by just under 1 billion euros. .
Outlook. As mentioned in our last comment on the profit warning, some of the trends that triggered this warning will continue to accompany voestalpine in the coming quarters. Visibility in the European automotive sector (WLTP, diesel strategy, US tariffs) will remain low for some time and will affect price negotiations in 2019. The demand for steel tool in China also weakens. On the cost side, raw material prices and logistics costs are also higher. Despite the current low price level, we believe that sentiment towards the steel sector and, therefore, the voestalpine stock will remain negative and volatile for some time.
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