Shares in Swiss Steel Holding took a substantial hit on Monday following the company’s announcement that it will no longer be able to achieve its earnings target for 2023. The anticipated recovery in European demand failed to materialize, leading to this significant setback.
As of 1050 GMT, shares were down by 9.5% at CHF0.11, reflecting the market’s reaction to this news.
Previously, the Swiss steel producer had provided a forecast for the current year, projecting adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) between 160 million euros and 200 million euros ($170.6 million and $213.2 million). However, the company has now withdrawn this forecast.
Several factors contribute to this decision. Firstly, neither demand nor profitability witnessed any improvement in July and August. Additionally, the company faced the challenge of higher raw-material and energy prices, which further weighed on its margins.
The financial performance of Swiss Steel during the first half of the year underscores the impact of these setbacks. The adjusted EBITDA for this period amounted to EUR70 million, which represents a significant decline of 59% compared to the same period last year. The company attributes this decline to the overall slowdown in the global economy and reduced demand.
While Swiss Steel Holding faces these challenges, it is important to note that the company remains committed to adapting its strategies and navigating through these difficult market conditions.