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Austrian steelmaker carves out profit in hard market

Austrian steelmaker Voestalpine said on Thursday it had pulled off a slight increase in full-year profits despite a "negative" international economic climate that has hampered steel and oil prices.

Published: 2 June 2016 12:06 CEST

Austrian steelmaker carves out profit in hard market

Voestalpine AG

Investors cheered the results which beat analysts' forecasts. Shares in Voestalpine, which specialises in steel used in the rail, automobile, aviation, home appliances and oil and gas industries, jumped 5.5 percent on the Vienna stock exchange in early trading.

Chief executive Wolfgang Eder said the results showed that its focus on “technologically and qualitatively sophisticated market segments” was the right strategy.

Profit after tax rose by 1.2 percent to €602 million for the fiscal year running from April 2015 to the end of March, on sales that dropped 1.1 percent to €11.1 billion, the company said in a statement.

Stripping out one-off effects, net profit however fell 7.7 percent, it added.

The company said there had been “an economic environment made extremely challenging by the dramatic slump in the oil and natural gas sector and global price deterioration for steel commodities, primarily due to enormous overcapacity in China”.

China produces more than half of the world's steel and is accused of flooding the market with products sold below cost in violation of global trade rules.

Angry steel manufacturers have urged the EU, the second-biggest steel producer, to follow the United States in punishing China with harsh tariffs.

Voestalpine said it was pencilling in an operating result that “at least approximates the figures of the last business year” for the coming year as it eyes indications that the economic situation will recover slightly over the year.

“The continuing strong performance of the automotive industry as well as the railway and aerospace sectors is definitely a positive factor,” it added.

The company employs some 48,500 staff and operates in 50 countries.

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Where are Austria's big international companies located?

Here’s where each of the ten largest companies in Austria, by revenue generated last year, are located, both within Vienna and outside of the capital.

One of Central and Eastern Europe’s biggest insurance firms, the Vienna Insurance Group is headquartered in the capital. Their main offices are directly north of the Innere Stadt on Schottenring, close to the Rossau district.

A fellow insurance firm, the Uniqa Group, is located close by. Owning over fifteen significant insurance providers across Europe, they are market leaders alongside Vienna Insurance Group. Their headquarters can be found in the eponymous Uniqa Tower, on Ferdinandstraße close to the Karmeliterviertel.

Erste Group, one of the continent’s biggest providers of financial services, was founded just over two hundred years ago in Leopoldstadt, a suburb adjoining Vienna’s centre to the east. Today, the group is headquartered in the Erste Campus, less than a five-minute walk from Vienna’s central train station.

Founded in the fifties, OMV is the country’s largest oil and gas company. The company owns three European refineries, including one at Schwechat in Lower Austria, near the capital. The company is based in the Hoch Zwei building in the Second District, near the banks of the Danube.

Construction company Strabag, responsible for massive infrastructure projects across Europe and South East Asia, is located across the Danube from OMW, near the Austria Centre and the expansive Donaupark.

Banking giant Raiffeisen International is headquartered in the Weissgerberviertel, north of Vienna’s city centre. Other divisions, including their software development teams, are based throughout the city centre.

Construction company Porr Group, which has many subsidiaries in Austria and involvement in significant railway building projects throughout Europe, has headquarters in Vienna’s south, five kilometres away, in the Favoriten district.

Verbund AG, Austria’s largest energy provider, can also be found outside Vienna’s centre. It is based to the south-west, close to the Mariahilf district and the city’s Westbahnhof, or western train station.

Steel and technology group Voestalpine is located away from Vienna in Linz, Upper Austria, roughly equidistant between Salzburg and Vienna. The company’s headquarters can be found between the Spallerhof district and the Industriegebeit, or industrial area.

Finally, international metals and technology firm Andritz AG is also based outside Vienna, in Graz in Styria. Their headquarters is some distance from the city centre, in the district which gave the company its name: Graz-Andritz.

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