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Coronavirus forces steelmaker Voestalpine to warn of operating loss

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Via Yahoo Finance

VIENNA (Reuters) – Austrian specialty steelmaker Voestalpine <VOES.VI> said on Tuesday it will not meet earnings targets for its recently ended business year because of the coronavirus pandemic, trimming its outlook for core profit and forecasting an operating loss.

The Linz-based firm, which supplies the auto, aerospace and energy industries, said it had been forced to write down the value of assets and goodwill because of the pandemic, which had hurt its earnings before interest and tax (EBIT).

But the outbreak had also dented business more generally, with a broader effect, including on its earnings before interest, tax, depreciation and amortisation (EBITDA) in its 2019/2020 business year, which ended on March 31.

“The COVID-19 pandemic and its global effects negatively influence the result of the 2019/20 business year of Voestalpine AG, which ended on March 31, 2020, both operationally and through one-time effects,” it said in a statement, referring to the illness caused by the coronavirus.

“The outlook of a just positive EBIT cannot be maintained. At present, a negative EBIT of around 135 million euros is expected,” it said, adding that the figure could still be subject to change.

The firm said two weeks ago that demand for its products in key sectors had collapsed within days due to massive reductions in capacity and production shutdowns in the automotive, aerospace, mechanical engineering, and oil & natural gas industries.

It said at the time that it was too soon to say what the pandemic’s impact would be on its results for the 2019/2020 business year, but it was shortening working hours at about 50 of its European units in Austria, Germany, Belgium, and France.

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On Tuesday it also trimmed its EBITDA forecast by roughly 100 million euros from 1.2 billion euros. It now expects EBITDA “in a range of more than 1.1 billion”, it said.

(Reporting by Francois Murphy; Editing by Chizu Nomiyama)

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