Voestalpine cuts profit forecast due to weak economic environment in Europe

Austrian steelmaker Voestalpine has lowered its profit forecast for the 2024/2025 financial year (ending March 31) due to the weak economic environment in Europe and uncertainty over future US tariffs. This is stated in the company’s message.

Voestalpine expects EBITDA for the period to be about €1.3 billion, compared to the previous forecast of €1.4 billion.

As noted, despite the fact that the 2024/2025 fiscal year started with good performance, the economic environment cooled significantly in the future. In Europe, there was almost no significant growth in the first 9 months of the current fiscal year (April-December 2024). In addition, voestalpine noted the weakness of the automotive industry in October-December.

The company said that from its point of view, the economy outside Europe, particularly in North America, performed much better. In China, demand for the Group’s products is generally good in fiscal year 2024/2025, except for European OEMs, which saw a decline in sales in the country in October-December.

Voestalpine noted that there are almost no signs of an economic boost for Europe in the coming months. In January-March, the company does not expect a recovery in construction, machine building, consumer goods and automotive, except for restocking in certain segments.

Expectations for North America are divided. As noted, the Group’s local North American businesses should continue to benefit from the good economic momentum. At the same time, the prospects for exports to the US are fraught with uncertainty due to the announced tariffs on steel products.

Last November, voestalpine CEO Herbert Eibensteiner said that Austrian industry needs government support. He explained that the challenges facing energy-intensive industries require political steps to enable sustainable, market-oriented business models. These sectors face pressure both from the need for their own transformation and from their customers.