The international steel and technology group Voestalpine not only struggles against global protectionism and economic slowdown. A cartel procedure and an "exaggerated" rapid expansion of the US auto parts installation have put the company so much at a loss that it has had to reduce its profit forecast for the second time since October.
Currently for Voest:
Billions of sales as a target: Voestalpine is massively expanding the rail division
At the beginning of the 2018/19 financial year, which runs until March, CEO Wolfgang Eder was still optimistic to repeat the record earnings of operating profit (EBIT) of 1.18 billion euros. The economic risk due to US punitive tariffs on aluminum and steel imports was considered "easy to manage" as it could affect up to three percent of the Group's sales.
Over time, external and internal issues have been added. In October, Voestalpine cut its profit forecast by nearly a fifth to nearly 1 billion euros. In addition to protectionist trade policies in several countries, production problems in the automotive industry due to new emission tests and low flow on the Danube, a fire at a Texas plant has already been quoted as a cause of the US auto activity intensification.
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Now profit expectations fall again by a quarter to just 750 million, which represents less than two-thirds of the initial target. Additional costs at the Cartersville plant are now much higher than expected in October. Above all, "ex-ambitious planning" and lack of qualified jobs would have led to unexpected and higher costs, said company spokesman Peter Felsbach.
To meet demand, over the past five years, several factories have been "built and run largely parallel". According to the plan, the plant should double sales within three years, from just under $ 100 million to $ 220 million by 2020/21.
At home, it is also the task of a provision for a cartel procedure suspected of unlawful pricing in connection with the production of heavy duty plates. How much delivery was needed, which was "because of recent information," Voestalpine will not announce today.
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But the company has more antitrust experience than it likes. In addition to the ongoing trial, Voestalpine has paid € 14.9 million, plus compensation for damages for participating in a rail cartel. The provision for this was initially of 205 million euros. For participation in a precompressed steel cartel, it was due to 7.5 million euros.
The company went unpunished due to the attention given to a stainless steel cartel. A process for participating in a cartel was filed. (Water / Red)