Salzgitter shares fall 12% after profit warning

Salzgitter shares fall 12% after profit warning

Salzgitter AG (OTCMKTS:SZGPY) saw its shares tumble 12% on July 2, 2025, following a disappointing profit warning from the German steel manufacturer. The stock, which had closed at $3.20 on July 1, dropped to $2.90 during trading, representing a significant loss for investors.

The company reported that its preliminary external sales for the second quarter declined to €2.3 billion, a decrease of €0.3 billion from the same period last year. EBITDA, a key measure of profitability, fell to €38.2 million from €107.3 million in the previous year. The quarterly earnings before taxes were negative €56.5 million, compared to a negative €5.7 million in the same period last year [1].

Salzgitter has revised its full-year outlook due to the challenging market conditions and the impact of its ongoing restructuring measures. The company now expects annual sales to range between €9.0 billion and €9.5 billion, down from its earlier forecast of €9.5 billion to €10.0 billion. Annual EBITDA is projected to be between €300 million and €400 million, compared to the earlier forecast of €350 million to €550 million [1].

Analysts have reacted to the news with varying opinions. Kepler Capital Markets upgraded Salzgitter to a "strong-buy" rating, while Oddo Bhf cut it to an "underperform" rating [3]. Morgan Stanley reiterated an "underweight" rating, and DZ Bank downgraded it from a "strong-buy" rating to a "hold" rating [3].

Salzgitter's shares have been volatile in recent months. The stock has seen a 6.9% drop on July 14, 2025, and has a market cap of $1.45 billion, a PE ratio of -3.32, and a beta of 1.43 [3]. The company's dividend yield is 0.52%, with a payout ratio of -1.23% [3].

Salzgitter's performance has been affected by various factors, including lower-than-expected vehicle volumes, a soft retail environment, and challenges in its light commercial vehicle division. The company has also faced increased competition and a declining retail market for its products [2].

The company's interim CEO, Duncan Minto, has been appointed following the departure of the previous CEO. The search for a permanent replacement is ongoing, but no timeline has been provided [2].

Investors should closely monitor Salzgitter's financial results for the first half of 2025, scheduled to be published on August 11, 2025, for further insights into the company's performance and future prospects.

References:

[1] https://www.rttnews.com/3554732/salzgitter-group-q2-preliminary-external-sales-down-cuts-fy25-outlook.aspx
[2] https://www.investing.com/news/earnings/renault-shares-slump-16-after-profit-warning-and-weak-h1-update-4137018
[3] https://www.marketbeat.com/instant-alerts/salzgitter-otcmktsszgpy-should-you-sell-2025-07-14/