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Investing.com -- Salzgitter AG (ETR:SZGG) shares fell more than 17% on Friday after the German steelmaker issued a profit warning and lowered its full-year guidance, citing a lack of recovery in the second half of 2025.
The company reported preliminary second-quarter EBITDA of €38 million, well below Visible Alpha consensus and Morgan Stanley (NYSE:MS) estimates of €115 million to €116 million.
Excluding a €23.5 million contribution from Aurubis, underlying EBITDA for the period was approximately €14 million. On a like-for-like basis, Morgan Stanley had estimated €99 million.
Salzgitter revised its 2025 EBITDA forecast to a range of €300 million to €400 million, down from its earlier range of €350 million to €550 million.
The midpoint of the new guidance, €350 million, is 28% below consensus expectations of €484 million from Visible Alpha and €469 million from Morgan Stanley.
The guidance implies a near doubling of EBITDA in the second half of the year, which comes amid declining hot-rolled coil prices in Europe and seasonal weakness in the third quarter.
The company also narrowed its forecast for earnings before tax to between €-100 million and €0.
This compares with its previous range of €-100 million to €+100 million. Morgan Stanley had projected €3 million, while the consensus estimate stood at €18 million.
Total (EPA:TTEF) cash needs for 2025 are estimated at approximately €1 billion, including €900 million in capital expenditures and €100 million in financing charges, according to Morgan Stanley.
Based on the midpoint of Salzgitter’s guidance, the projected free cash flow to equity deficit exceeds €650 million for the year.
The company had forecast net debt of about €900 million for the second quarter, implying a net debt-to-EBITDA ratio of approximately 3 using the updated full-year guidance.