Klöckner Q3 Preliminary Adj. EBITDA Lower Than Forecast; Cuts FY Adj. EBITDA View

Klöckner & Co SE (KCO), a German steel and metal company, reported that its third quarter preliminary operating income or EBITDA, before material special effects, of 16 million euro. It was below the previous forecast range of 50 million euros -100 million euros due to an unforeseen inventory write-down at the end of the quarter as a result of the exceptionally high steel price declines and an actively enforced inventory reduction.

The company said it was able to generate strong and significantly positive cash flow from operating activities of around 150 million euros with a significantly reduced inventory level.

The company noted that it continues to expect one of the best full-year results since its IPO in 2006, despite the slowdown in earnings momentum in the third and fourth quarters of 2022 due to the significant steel price correction.

The company cut annual EBITDA, before material special effects, outlook to about 400 million euros, from the previous forecast of more than 500 million euros, due to the active reduction in inventories against the background of the macroeconomic environment and the inventory write-downs.

The company forecasts an exceptionally positive cash flow from operating
activities for the full year 2022.

In addition, the company had already achieved positive material special effects in the first quarter, in particular from the sale of real estate in Switzerland as well as in France in the amount of 53 million euros.

The company will announce its third quarter results on November 3, 2022.

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