Kloeckner & Co CEO Says Company Will Withdraw From East Europe
May 25 2012 - 7:31AM
Dow Jones News
German steel distributor Kloeckner & Co. SE (KCO.XE) will
completely withdraw from markets in Eastern Europe, Chief Executive
Gisbert Ruehl told shareholders at the company's annual general
meeting Friday.
"In the interesting markets like Poland and the Czech Republic,
our market share is insignificant and other markets like Romania
and Bulgaria are losing their attractiveness," Ruehl said according
to the text of a speech.
His comments come after Ruehl announced a possible withdrawal
from the markets in early May. At the time he cited a challenging
situation on steel markets in the wake of the euro-zone sovereign
debt crisis, which particularly affects southern and eastern
European peripheral countries.
Ruehl said that Kloeckner & Co.'s operations in Eastern
Europe are too fragmented.
He said that 13 distribution sites are involved in the sale of
around 100 million metric tons of steel in the region, while
selling the same volume in Germany would only involve two
distribution centers.
Kloeckner & Co. previously said that its Eastern European
subsidiaries generate around 1% of the company's overall revenue
and are presently posting losses before interest, taxes,
depreciation and amortization.
Ruehl also reiterated the company's 2012 earnings outlook,
saying earnings before interest, taxes, depreciation and
amortization, or Ebitda, are expected to increase this year.
However, he said that this will only be the case if the broader
European economy recovers in the second half of the year.
For the second quarter, the company expects Ebitda of between
EUR50 million and EUR60 million.
-By Jan Hromadko, Dow Jones Newswires; +49 69 29 725 503;
jan.hromadko@dowjones.com