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Klöckner and Co. (KCO) reported 1Q EBITDA of €45m, short of the Street’s €48.8m, but in line with company guidance of €40-50m. Results were down sharply from the €104m of EBITDA from a year ago, which management said was aided by windfall profits, but were up from the adjusted €24m in 4Q.
Guidance was for 2Q EBITDA to increase sequentially to €50m-€60m on slightly higher shipments with the company expecting the current oversupply to press margins. Volume for the full year should rise about 5% from 2011, but gains in EBITDA depend on a recovery in Europe in 2H. KCO is more optimistic about the US market, where shipments could be up 10% in 2012, while European tonnage could fall by “up to 5%.”
KCO said that inventory levels in the US and Europe are probably “a bit” too high and will reduce inventories going forward. The company said it will be cautious on purchasing because there’s no need to pre-buy material.
In the US, the company said that imports may dry up by late May, with tonnage coming in at much lower levels in 3Q.
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