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Trading statements

Vesuvius cautiously optimistic on FY 2017

10 May 2017 07:23

Vesuvius said that whilst it is still early in the year, and recognising the inherent uncertainty in predicting end market resilience, its expectations for 2017 trading performance are cautiously optimistic.

"At our year-end results in early March, we highlighted encouraging early signs of improvement in the global market environment," the company said.

It added that this trend had continued since then across Vesuvius' major regions, resulting in delivery of a strong Q1 2017 in comparison to a relatively weak Q1 2016.

Vesuvius had benefited in Q1 2017 from the 5.7% year-on-year growth in global steel production, as reported by the World Steel Association.

"However, this Q1 2017 increase in global steel production is off the relatively low base of Q1 2016 and full year 2017 growth expectations for the market are materially lower than this figure.

"In Foundry, the market environment remains mixed with light vehicles slowing in the USA and static in the rest of the world. Heavy truck and mining sales are showing slight signs of recovery but this varies by region."

Vesuvius said it continued to make progress in the delivery of its restructuring programme.

"The total targeted annual savings now stand at £40m, up from £35m, whilst associated costs remain unchanged at £45m. We continue to assess restructuring opportunities across our businesses which could potentially yield further savings in the future," the company said.

"All things being equal, based on the average exchange rates in Q1 2017, and were current spot foreign exchange rates to persist for the remainder of 2017, this would have increased our 2016 Trading Profit by approximately 7%."

Story provided by StockMarketWire.com

Related Company: VSVS

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