Profit decrease leads to increased dividend by Voestalpine
Steel Giant Voestalpine Takes a Hit, Cuts Dividend
Embattled Austrian steel conglomerate Voestalpine has reported a significant drop in profits for the 2024/25 fiscal year and announced a reduction in its dividend. The company's struggles stem from a tough market environment and internal restructuring measures.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) plunged to €1.3 billion from €1.7 billion in the previous year, Voestalpine revealed on Wednesday. Net profit dropped to €179 million from €207 million, and revenue decreased by 5.6% to €15.7 billion. The dividend will now be reduced to €0.60 (previously €0.70) per share.
The setback was largely due to a challenging market and Voestalpine's sale of the Buderus Edelstahl subsidiary, along with adjustments to its sales structure. Furthermore, the company was burdened by negative one-off effects in two business divisions.
Voestalpine anticipates an EBITDA of between €1.4 and €1.55 billion for the 2025/26 financial year. The anticipated U.S. tariffs on steel products are likely to impose a mid-double-digit million-euro penalty on the company's results.
Investors can keep a close eye on Voestalpine's performance moving forward. The steel industry faces a challenging market, and the impact of tariffs and internal restructuring efforts will continue to shape Voestalpine's fortunes. The company's strategic investments in sustainable projects, such as the Greentec Steel initiative (€500 million of €1.5 billion invested so far), may provide a much-needed boost to future profitability.
voestalpine
Source: Reuters
Wien ·
Enrichment Data:- Voestalpine's future profits are under pressure from various factors, including market challenges, strategic investments, tariffs, and trade policies.- The company has been making strategic investments to enhance competitiveness and sustainability, while battling a difficult market environment.- Voestalpine anticipates U.S. tariffs on steel products to impact its earnings negatively in the mid-double-digit million-euro range over the 2025/26 fiscal year.- Despite a challenging revenue climate, Voestalpine reported a high free cash flow of €309 million during the 2025 fiscal year.- The company remains concerned about the lack of concrete government action to support the industry at both national and EU levels.
The financial difficulties at Voestalpine, stemming from a challenging market and internal restructuring, led to a reduction in the company's dividend from €0.70 to €0.60 per share, indicating a decline in investor returns from the steel industry giant. As Voestalpine pivots towards sustainability with investments like the Greentec Steel initiative, the company's future earnings will depend on factors such as market conditions, tariffs, and trade policies, making it a subject of interest for investors navigating the steel investing landscape.
