Acerinox third quarter results attest to the group’s resilience despite weak demand in their main markets – the U.S. and Europe.
- Production increased 21 percent compared with the second quarter, due to the reactivation of production at Acerinox Europa’s plant, with a new collective bargaining agreement signed after an almost five-month strike.
- Acerinox agreed to sell Bahru Stainless for $95 million.
- The UK Competition and Markets Authority (CMA) has authorized Acerinox to acquire Haynes International, and the closing of the transaction is now pending only the decision of the Austrian authorities.
“All these strategic steps will enable us to improve our competitiveness, focus on our core markets and adequately meet the challenges of the future”, stated Bernardo Velázquez, chief executive officer.
In the third quarter of 2024, Acerinox obtained, after tax and non-controlling interests, a profit of EUR 48 million, which represents a total sum of EUR 162 million for the first nine months of the year.
EBITDA, that amounted to EUR 114 million in the third quarter (EUR 350 million in the first nine months), remained stable and attests to the “resilience of the company in challenging conditions”, as stated by Acerinox’s chief executive officer, Bernardo Velázquez.
In turn, revenue from January through September amounted to EUR 4.1 billion, which represents a drop of 7 percent compared with the same period of 2023, due to weak apparent demand in Europe and the United States, as well as lower effective prices and the impact of the strike at Acerinox Europa.
Melting shop production (491 thousand tons) has increased by 21 percent compared with the second quarter of 2024 (7 percent higher than in the third quarter of 2023) as a result of the reactivation of the production at Acerinox Europa after a new collective bargaining agreement was signed, after an almost five-month strike.
The results of the high-performance alloys division continue at a good level (with EBITDA of EUR 28 million), although 17 percent below that of the second quarter as a result of the fall of nickel prices.
As stated by Velázquez, “The strength of our American subsidiary, North American Stainless (NAS), and of our high-performance alloys division, has enabled the group to report the aforementioned third-quarter EBITDA of EUR 114 million, despite the challenging market conditions within the stainless steel sector”.
Outlook
The weakness of the demand for stainless steel will continue for the fourth quarter. The end of year market seasonality and the geopolitical and macroeconomic uncertainties do not permit Acerinox to be optimistic in the short-term, despite the fact that inventories continue to be low.
The high-performance alloys market remains stable and the order book of VDM continues to be solid, although its activities will be affected by market seasonality in the fourth quarter.
EBITDA for the final quarter is expected to be higher than in the third quarter due to the sale of Bahru Stainless, and adjusted EBITDA is expected to be lower than in the third quarter. Acerinox plans to reduce operating working capital and, consequently, net financial debt.
Published December 2024
