Kloeckner & Co., a leading German steel distributor, saw a significant surge in shares as the company announced a strategic cost-savings initiative. Despite lowering its profitability goals, the company remains optimistic about its future prospects.
Positive Market Reaction
At 0911 GMT, Kloeckner & Co. shares were up by an impressive 8% to EUR6.02. Investors welcomed the news, highlighting their confidence in the company's ability to adapt and thrive in challenging market conditions.
Adjusted Full-Year Outlook
In response to a tough macroeconomic environment, particularly in Europe, and lower steel prices, Kloeckner & Co. revised its full-year outlook for operating income before special effects. The company now aims to achieve between 170 million euros and 200 million euros ($180.5 million to $212.3 million), compared to its initial target of between EUR220 million and EUR280 million.
During the third quarter, Kloeckner achieved an operating income before special effects of EUR41 million, meeting the lower end of its expectations.
New Efficiency Program
To address the challenging market conditions and enhance operational efficiency, Kloeckner & Co. has implemented an efficiency program starting this quarter. The program aims to improve operating income by approximately EUR25 million per year.
Financial Performance Overview
Kloeckner & Co. reported a net loss of EUR8.0 million for the nine-month period, a significant decline from the net income of EUR301 million recorded in the same period the previous year. Additionally, cash flow from operating activities during the third quarter decreased from EUR163 million to EUR36 million.
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