Vesuvius profit falls as steel market demand remains weak

Fri Aug 2, 2013 2:45am EDT

Aug 2 (Reuters) - Vesuvius Plc, a maker of ceramic moulds and lining for steelmakers and foundries, reported an 11 percent fall in first-half profit reflecting the weaker conditions year-on-year in the global steel and foundry markets.

The company said activity levels in September, when major steel and foundry customers in Europe usually resume operations after summer shutdowns, would be an important driver of performance for the rest of the year.

The company - formed in December when Cookson Group split into two companies - reported a trading profit of 71 million pounds (about $108 million), down from 80 million pounds a year earlier.

Revenue fell 5.6 percent to 773 million pounds in the six months ended June 30. Steel division revenue fell 3.2 percent to 514 million pounds.

Steel production fell 5.4 percent in its key North American market in the first half of the year, while it dipped 3.9 percent in Europe, Middle East and Africa.

Europe and North America account for 70 percent of Vesuvius' Steel division revenue.

The company had earlier this year announced plans to cut 850 jobs, or 8 percent of its workforce and warned that revenue would fall in 2013.

Vesuvius, which has been focusing on its core steel and foundry markets, sold its precious metals processing business that recycles and provides semi-finished gold, silver and platinum to the jewellery industry, for 56.8 million euros last month.

The company has also exited its solar crucibles business.

Vesuvius said on Friday that it had sold a small, low-margin refractory installation business in Canada after the end of the first half. The unit generated revenue of 9.5 million pounds in the first half of the year.