CHICAGO Metals distributor and processor Klöckner & Co. SE credits its acquisition of Macsteel Service Centers USA Inc. and strong organic growth in the United States for providing a lift in quarterly and annual revenues.
A significant decline in steel demand and pricing within a troubled European economy, however, translated into net losses, according to the Duisburg, Germany-based company, which has been rationalizing its European assets.
"We responded in a timely fashion to yet another steep drop in steel demand in Europe by stepping up our restructuring program," chairman and chief executive officer Gisbert Rühl said in a March 6 statement. "More than two-thirds of the measures are already implemented, so we can enter the new year with a tailwind despite ongoing market challenges."
Klöckner shipped 7.07 million tons of products last year, up 6.1 percent from 6.66 million tons in 2011, largely the result of its expansion in the United States. Klöckners Americas shipments rose 30.8 percent to 2.94 million tons from 2.25 million tons, driven by the Macsteel acquisition and above-average organic growth. Sales in the companys Americas segment jumped 33.4 percent to 2.74 billion ($3.56 billion) from 2.05 billion.
Volumes sold in Europe fell 6.5 percent year over year, while the market as a whole contracted by 9 percent.
Klöckner posted a fourth-quarter net loss of 121 million ($157.17 million), more than quadruple a 27-million net loss in the same period a year earlier on sales that fell 6.1 percent to 1.63 billion ($2.12 billion) from 1.74 billion. For the full year, it posted a net loss of 198 million ($257.19 million) in contrast to net income of 10 million in 2011 on sales that rose 4.1 percent to 7.39 billion ($9.6 billion) from 7.1 billion
The losses reflected restructuring costs and asset impairments, the company said.
Klöckner expects 2013 shipments and sales to be roughly flat due to additional growth in the United States being offset by lower shipments in Europe due to restructuring.
"The heightened presence in the U.S. based on the Macsteel acquisition, coupled with organic growth, will lead to another shift in sales share from Europe to the Americas," said Rühl, with significantly more than 40 percent of companywide shipment totals in the Americas segment this year. "We are well equipped to increase our earnings power and to continue growing in the U.S."