Soaring profits expected from Salzgitter

German steel firm Salzgitter is expected to post soaring half-year profit when it reports earnings this Thursday.

The company says pre-tax profit for the first half of 2015 will be €80.2 million, compared to a loss of €4.2 million during the same period last year. Last year’s loss included write-downs on some production assets and restructuring expenses.

This huge surge in first-half profit is despite a slight dip in sales from €4.55 billion last year to €4.53 billion during the first six months of this year.

The company, which produces steel sections used in water engineering, road and railway construction, civil engineering and environmental protection, was helped to a profit by its restructuring programme, despite the still-fragile state of the European steel market.

Salzgitter said guidance for the full year remains unchanged for a consolidated pre-tax result in the lower to mid double-digit million euro range.

“In spite of the upcoming regular major repair of a blast furnace that will burden profit by around €80 million in the second half of the year, the foundations have been laid for the group’s sustainable return to the profit zone,” the company said.

The company, which is Germany’s second-largest steel producer by volume, said it expects sales to increase to around €9.5 billion this year.

It also expects a “relatively restrained economic recovery in volumes and selling prices” would help it keep sales stable this year, as long as Europe did not slide back into recession.