Vesuvius FY profits drop amid 'difficult' market conditions

29th Feb 2024 07:58

(Sharecast News) - Molten metal flow engineer Vesuvius reported a drop in full-year profit and revenue on Thursday amid "difficult" market conditions.

In the year to the end of December 2023, pre-tax profit fell 13.2% to £179.4m, with revenue down to £1.9bn from £2.0bn a year earlier. This reflected lower volumes in a weaker market, partially offset by good pricing performance and market share gains in Flow Control and Foundry, Vesuvius said.

Vesuvius said that after some limited improvement in the first half from the very low level of H2 2022, its steel markets weakened again in the second half of 2023. This was particularly pronounced in Europe, where steel production fell by 7.3% in 2023 compared with the previous year, and was 5% below the worst year of the pandemic in 2020.

The company proposed a final dividend of 16.2p a share, taking the full-year dividend to 23p, up 3.4%.

Chief executive Patrick Andre said: "Despite the short-term uncertainties in our end steel and foundry markets, we remain confident in the mid to long term growth potential of these markets and in particular the steel market outside of China, which should be a tailwind for us.

"The strength of our technology-based business model should also enable us to continue simultaneously outperform our underlying markets in Flow Control and Foundry and maintain a positive pricing performance for all our business units in the coming years.

"This, coupled with our relentless drive to optimise our cost base as illustrated by the launch of our new cost optimisation programme, positions us very well to achieve our objectives of 12.5% return on sales by 2026 and free cash flow generation of £400m over the next three years."