Steel Giant Salzgitter Struggles with Market Realities: Stock Slides after Mixed Financial Statement Presentation

The figures presented by the steel company Salzgitter, after initial approval from investors, led to a share price slip into the red by midday. A temporary increase in share price eroded quickly as the investors interpreted the company's balance sheet and forecast negatively. Consequently, the stock suffered a markdown of almost two percent and was among the underperforming values in the SDax, having already reached a price level not seen since last autumn. Reactions to Salzgitter's release were mixed. On one hand, the decline in steel prices and the cooling economy last year led to a noticeable drop in revenue and profit. On the other hand, the steel conglomerate maintains the expectation that the business environment will brighten over the course of the year. The conflict between preliminarily disappointing figures for the current year and the general market expectation for 2024 is reflected in the differing assessments of analysts. Cole Hawthorn from Jefferies emphasized that the fourth quarter was significantly weaker than market participants had expected but praised the company's forecast as a supportive component for market expectations. In a direct comparison, Moses Ola from JPMorgan noted a more pessimistic attitude from Salzgitter towards the European steel market compared to competitors. Salzgitter's investment plans also provided fodder for discussion. The earmarked investment volume for the year 2024 is significantly higher than previous assumptions. Financial expert Christian Obst from Baader Bank commented that the company's substantial reduction in debt has well-prepared it for additional expenses. Ola, however, warned of possible effects on the free cash flow and an expected higher level of debt in 2024 than previously assumed. The share price of the steel giant has experienced significant volatility since a high in spring 2022. Despite hopes held at the beginning of the year, Salzgitter's paper lost almost 17 percent in value and was last quoted at 23.30 euros.