* Cuts 850 jobs
* Expects to dispose of precious metals processing unit
* 2012 headline pretax profit falls 29 pct, revenue drops 8
* Shares down 4 pct
By Abhirup Roy
March 21 Vesuvius Plc, a maker of
ceramic moulds and linings for steelmakers and foundries,
forecast lower revenue for 2013 and cut 850 jobs, or 8 percent
of its workforce, as it expects weakness in the steel market to
Vesuvius, formed in December when Cookson Group split it
into two companies, said it expected to dispose of its precious
metals processing business to focus on the steel and foundry
markets, which would help margins towards the end of 2013.
Vesuvius expects trading in the first half of this year to
be broadly similar to the second half of last year.
"We have experienced a significant decline in our steel and
foundry market in this period (second half of 2012) but there is
no further degradation today and so our expectation is that the
market is stabilising at this level," said Chief Executive
Steel production in its key European and North American
markets fell about 10 percent in the second half from the first
half, the company said.
Vesuvius on Thursday said it was in advanced discussions to
sell its precious metals processing (PMP) business, which
recycles and provides semi-finished gold, silver and platinum to
the jewellery industry.
The company has already exited the solar crucible business
where demand has not recovered since the solar industry went
into a tailspin in 2011, hammered by overcapacity, falling
government subsidies and trade disputes.
Vesuvius said it also closed a steel consumables plant in
China and exit its brick refractories business in Germany as
part of its restructuring, aimed at quitting low-margin
businesses, reducing costs and improving cash flow.
2012 PROFIT DROPS
Vesuvius said headline pretax profit, excluding the PMP
business, fell 29 percent to 110.9 million pounds ($167.8
million) in the year ended Dec. 31.
Revenue, excluding the PMP business, fell 8 percent to 1.55
Revenue from its steel business, which makes flow control
products and refractories, fell almost 6 percent and accounted
for 65 percent of total revenue.
Free cash flow from continuing operations rose 69 percent to
54.2 million pounds.
Vesuvius shares were down 4 percent at 371.2 pence on the
London Stock Exchange at 1140 GMT. They had risen nearly 20
percent up to Wednesday since the split went into effect on Dec.
Cookson's former performance materials division is now
called Alent Plc, which is yet to report results.
Alent's shares, which were up 0.10 percent at 388.5 pence at
1141 GMT, have risen about 25 since the split.