Austrian steelmaker Voestalpine finds itself navigating turbulent waters as its stock approaches yearly highs while simultaneously announcing significant workforce reductions. This contrasting picture emerges as the company delivers unexpectedly strong half-year results alongside sobering news about job cuts driven by international trade policies.
Financial Resilience Amid Market Challenges
For the first half of 2025/26, Voestalpine demonstrated remarkable operational efficiency despite facing revenue pressures. The company reported a 5.6% decline in sales to €7.6 billion, yet managed to achieve an 8.6% increase in net profit, which reached €199 million. Key performance indicators revealed substantial improvements in financial health:
- EBITDA margin expanded from 8.9% to 9.5%
- Free cash flow remained robust at €296 million
- Net financial debt decreased to €1.5 billion
- Gearing ratio reached its lowest level since 2006/07
This financial discipline has been rewarded by market participants, with shares advancing beyond €34 and approaching the 52-week peak of €34.32.
Workforce Restructuring Driven by Trade Measures
Behind these impressive figures lies a difficult operational reality. While investors celebrate the financial performance, the company has confirmed plans to eliminate 280 full-time positions along with 60 temporary roles across two Austrian facilities.
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CEO Herbert Eibensteiner attributed these cuts directly to economic pressures stemming from U.S. import tariffs that have rendered certain production lines unprofitable. Additional contributing factors include:
- The Kindberg plant transitioning from three to two shifts
- Escalating energy and labor expenses
- No immediate relief anticipated from current market conditions
This workforce reduction highlights the uneven performance across business segments, with railway systems, aerospace, and storage technology showing strength while construction, mechanical engineering, and consumer goods face stagnation.
Future Prospects and Underlying Risks
Management maintains its full-year guidance despite current challenges, projecting EBITDA between €1.4 billion and €1.55 billion for 2025/26. Ongoing restructuring initiatives within the Automotive Components and High Performance Metals divisions are expected to yield benefits by year-end.
However, the fundamental question remains whether the current stock appreciation can be sustained amid growing political risks. Though shares trade merely 0.06% below their annual high, the company faces potential headwinds that could test its operational resilience in the coming months.
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