The corona crisis does not simply pass Salzgitter AG by. The steel manufacturer is deep in the red. The main reason is the stumbling automotive industry. The company from Lower Saxony wants to continue to adhere to the ambitious climate targets.
The steel manufacturer Salzgitter posted a loss of millions in the first half of the year due to the Corona crisis. After the first six months, there is a loss of 144.7 million euros after taxes, after the company had earned 96.4 million euros in the same period of 2019. While the construction industry remained stable despite the crisis, the collapse in demand from the automotive industry in particular had a negative impact on earnings, as the group reports.
At the end of July, Salzgitter had already announced a deficit of 127.8 million euros with preliminary figures. The consequences of the pandemic would have affected the group significantly more in the second quarter of 2020 than in the first three months of the year, it is said. The current focus is on managing the economic impact. "The top priority is to secure the Group's liquidity," says CEO Heinz Jörg Fuhrmann.
The companies in the group recorded a decrease in occupancy of 10 to 70 percent compared to 2019. According to the company, the oversized import quotas for duty-free steel imports into the European Union, which were already oversized before the crisis, had no protective effect. Their share as a result of the decline in steel demand in the EU even increased in the second quarter. In the first half of the year, sales fell from 4.53 billion to 3.63 billion euros compared to 2019.
A wide range of products cushions the effects
At the steel producer, those responsible continue to assume that the second and third quarters will be the lows of the current crisis. At the same time, however, it is emphasized that the outlook with a "noticeably reduced sales" and a negative pre-tax result in the "low to mid three-digit million euro range" can only be a rough estimate. According to the company's own assessment, the diversity of the products in particular is reducing the effects of the crisis on the group.
In the long term, Salzgitter AG is striving for climate-neutral steel production and will gradually use hydrogen instead of coke. The aim is to reduce CO2 emissions at the main Salzgitter plant by around a quarter by 2025, and by up to 95 percent by 2050. In June, the Federal Cabinet in Berlin adopted the national hydrogen strategy, a program that provides billions in subsidies, legal relief and specific production targets.
The chairman of the Greens in the Bundestag, Anton Hofreiter, describes the project in Salzgitter as "exciting". "It shows a practicable way of achieving greenhouse gas neutrality in a key industry like the steel industry in Germany by 2050," says Hofreiter. He will visit the group on Thursday to get an idea of the state of transformation in the steel industry.
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