FRANKFURT (dpa-AFX) - The shares of the steel group Salzgitter were unable to maintain their initial price gains for long after the presentation of the balance sheet on Friday. After the statements were initially received positively in the opening minutes, a negative view of the balance sheet and the outlook quickly prevailed among investors. At around midday, the shares were among the weakest stocks in the SDax index of smaller stocks, falling by a good 1.9 percent. They had previously reached another low since the end of October.

One trader had already complained in the morning that the Group's news was slightly negative overall. The figures for 2023 were slightly below consensus and a weak first quarter is still expected in 2024. Most industry experts recognized light and shade in the balance sheet.

Salzgitter was hit by a significant drop in steel prices and the cooling economy last year, with the Group suffering a decline in sales and profits. The steel group now expects the market environment to brighten increasingly over the course of the year.

Jefferies expert Cole Hawthorn criticized in particular an unexpectedly weak fourth quarter: earnings before interest, taxes, depreciation and amortization were significantly lower than industry analysts had expected on average. Meanwhile, he viewed the company's outlook positively, as he himself had previously been even more cautious about the year. In his opinion, Salzgitter's forecast should now support market expectations, which were closer to the Group's targets. Meanwhile, JPMorgan expert Moses Ola pointed out that Salzgitter was more pessimistic about the steel market in Europe than its competitors.

Experts were also talking about the planned investments, the volume of which, according to Ola, will be around half as high as expected in 2024. Christian Obst from Baader Bank commented positively that Salzgitter is well prepared for further expenditure thanks to the remarkable reduction in debt. However, industry expert Ola also sees this as a threat to the free cash flow, where consensus expectations must now fall significantly. At the same time, a higher level of debt is to be expected in 2024 than the market had previously anticipated.

Salzgitter shares have been on a rollercoaster ride since reaching an interim high of just under EUR 49 in spring 2022 and have been trending downwards for the past year. With a most recent price of 23.30 euros, the share has lost almost 17 percent of its value since the turn of the year./tav/tih/mis