VÍTKOVICE STEEL company improved its economic outcomes


VÍTKOVICE STEEL company improved its economic outcomes

After a difficult year 2018, VÍTKOVICE STEEL company managed to stabilize its economy last year and get back to neutral operational performance. In 2019, the company made a loss of CZK 480 million, which is, however, significantly lower – by CZK 1.2 billion – than in the previous year.

“In 2019, we managed again to exceed the limit of half a million tons of products sold, we shipped 520 thousand tons, but the revenue was lower than in the previous year. Situation in the steelmaking industry is complicated, we are under a lot of pressure due to inexpensive imports from Ukraine and other third countries,“ says Dmitrij Ščuka, VÍTKOVICE STEEL CEO and Chairman of the Board of Directors.  

First half of 2019 brought to VÍTKOVICE STEEL the expected positive impact of protective measures introduced by the European Union, which made it possible to save a traditional production of high‑grade sheet piles thanks to limiting dumping imports from China and brought a significant improvement of the economic outcome. However, in the second half, the steel market went down and prices did not show a good trend, combined with dumping imports of plates from Eastern Europe.

"Last year, the company revenue from its own products and services dropped to CZK 8.4 billion from CZK 9.4 billion in 2018. 77% of products were sold abroad, while the EU countries were the key markets for the company in 2019, representing almost 60% of the total revenue from export," added Radek Strouhal, CFO and member of VÍTKOVICE STEEL Board of Directors. The company makes steel plates, sheet piles and cut shapes. Most of its products are used in building industry, manufacturing of machinery, ship building, manufacturing of pressure cylinders, manufacturing of construction machinery, etc.

Throughout 2019, the company made a series of capital investments in line with its long-term development plan. Modernization of cut shapes production technology is among the most important ones. A new flame-cutting machine (put into operation this year) can cut special bevel angles important for welding, which will enable the company to get a new business portfolio. Also, investment continued into the renovation program for overhead cranes, modernization of plate rolling mill digital control system, increase of occupational safety and improvement of working environment.

This year started well but the whole industry was hit by the coronavirus pandemic and it is currently impossible to estimate all the impacts on the market or how long the recovery is going to take. "A large portion of our plates and all of the sheet piles are used in infrastructure projects, which means in the construction of bridges, roads, railroads, etc. These projects are expected to continue. It is more complicated with the manufacturers of machines, parts, etc. Therefore this year is going to be complicated too because the competition is persistent and the European Commission does not help the steelmaking industry much, rather the opposite," says Dmitrij Ščuka.

VÍTKOVICE STEEL, a. s. is a traditional European manufacturer of rolled steel products, the biggest manufacturer of steel plates in the Czech Republic and the only manufacturer of so-called sheet piles in CZ. The company is owned by transnational investment funds from the former Soviet Union countries. It employs 958 people.

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Ing. Jana Dronská, MBA

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