More orders from Europe for Danieli

More Europe for Danieli. The portfolio of the Friuli-based group, one of the world’s leading players in steel plant engineering, is beginning to see results, after years of a dry spell, significant orders within the European market as well (alongside those from strategic markets such as India and the US, and from global players such as the South Korean firm Hyundai). This is a sign of a rebound in the European steel sector, driven by the safeguard measures decided by Brussels, from which ABS – the subsidiary active in steel production, which aims to double its output to 2 million tonnes thanks to a major investment in a new furnace – is also benefiting. At the same time, in Italia, the group remains involved in two key initiatives for the future of the Italian steel industry: the one concerning the former Ilva, as part of the consortium led by Federacciai in which Danieli participates alongside ABS (“we did so in the spirit of the steel industry” as Camilla Benedetti, chair of ABS and vice-chair of the group, downplayed the matter yesterday), but above all the one concerning Piombino, in partnership with the Ukrainian firm Metinvest for the construction of a new steelworks. The consortium is seeking a third partner: by the end of the year, a partner is expected to be selected from a ‘shortlist’ which, according to rumours, is longer than might have been expected.

The group closed its latest financial year, in recent weeks, with a 9 per cent fall in turnover from 4.2 to 3.8 billion, whilst maintaining its profit margins and posting a profit described by the chairman, Alessandro Brussi, as ‘satisfactory’. “The decline,” explained the group’s CEO, Giacomo Mareschi Danieli, yesterday, “is linked to a lag in order intake; we expect a recovery as early as this year.” Meanwhile, the order book remains healthy, with the aforementioned first ‘green’ orders on the European market, “in line with the specialisation of our plants”, he added. Among the new orders, “we have performed well in India, now a key market, but above all we are particularly proud of a major order in the US”, worth 650 million dollars, “significant first and foremost because it was secured in a dynamic market such as the American one, and secondly because it came from the South Korean firm Hyundai, a client with whom we had never worked before. Until recently, the major Japanese and South Korean players – he added – were wary, but now, as demonstrated by Hyundai, and also by JFE, we are able to sit down at the table with everyone. However, now that we have achieved a leading position across numerous product types, we must not rest on our laurels. Our vision is to maintain our focus on the customer and on execution.’

As regards production, as mentioned, the new support measures decided upon by Brussels “are providing a boost, enabling us to improve our profit margins,” explained Camilla Benedetti. “This is also evident from the accounts, with a challenging first half of the year and a second half that saw an improvement in shipments and key performance indicators”. The group forecasts total turnover of between 3.9 and 4.2 billion for the coming financial year, with EBITDA of between 430 and 500 million, against an order book of around 6 billion. However, the target for three years’ time is set at 700 million in EBITDA and 5 billion in turnover, by the time the new kiln in Abs is completed (work on the foundations has now begun).

In the background are the two Italian projects in which Danieli is playing an active role. In Piombino, Danieli holds a 25 per cent stake in a joint venture with Metinvest to build a 27 million-tonne greenfield steelworks. “The project finance is very complex; Metinvest is suffering significant losses due to the conflict in Ukraine,” said Brussi yesterday, “and that is why we have taken steps to broaden the partnership. We have received a very positive response, and there are numerous interested parties. We will select the partner within a month and a half.” As for the former Ilva site, however, “we have been granted access to the data room,” said Camilla Benedetti, “and we are examining all aspects with a view to building a sustainable plant and in anticipation of a possible bid.”