Acerinox reports slower but profitable 2023

Spain-based Acerinox, which also produces stainless steel and alloys in the United States, reports its metals output declined in 2023 compared with the previous year, but it still managed a net profit of 228 million euros ($247 million).

“[Last year] was a year of very low activity for the stainless steel market due to the inventory adjustment that began during the second half of 2022," Acerinox CEO Bernardo Velazquez says. "We estimate that apparent consumption in the United States and Europe fell by around 20 percent. Meanwhile, the high-performance alloys sector maintained positive performance during the year.”

Velazquez says last year’s challenges also included supply chain incidents that affected trade routes, but adds that, nonetheless, Acerinox produced earnings before interest, taxes, depreciation and amortization (EBITDA) of 703 million euros ($762 million) in 2023.

The company achieved a net profit figure of 228 million euros ($247 million) last year on revenue of 6.6 billion euros ($7.16 billion).

The Spanish firm, which operates the North American Stainless (NAS) complex in Kentucky, recorded revenue of 8.7 billion euros (approximately $9.26 billion in 2022) in 2022, serving to demonstrate the year-on-year decline in output.

Velázquez summarizes 2023 as “a challenging but positive year for Acerinox," and says the company also was able to reduce its debt by 99 million euros ($107 million).

Looking at the year now underway, the company points to several activities in its U.S. market, including the early-February offer for NAS to acquire Haynes International, an Indiana-based firm that develops, manufactures and markets "technologically advanced" high-performance alloys.

Acerinox also says its previously announced $244 million investment at the NAS complex in Kentucky has been designed to bolster the American subsidiary’s leadership in the U.S. and keep pace with the growth of the market.

The the Kentucky plant’s production capacity will increase by 20 percent thanks to improvements to productivity based on digital solutions and the purchase of state-of-the-art equipment, the company says.

Acerinox also remains on track on a more than $70 million investment in its VDM Metals business unit designed to increase that high-performance alloy producer’s production by 15 percent and boost efficiency with additional sales of more than 6,000 metric tons per year from 2026.

The company is less optimistic about conditions at its Bahru Stainless complex in Malaysia. “The group is in the process of strategic reflection on the future of Bahru Stainless and does not rule out cessation of activity,” Acerinox says.

As a result, the company says, an impairment of Bahru Stainless’s assets was made in the amount of 156 million euros ($227 million), without resulting in a cash outflow.

Acerinox describes Bahru Stainless as one of the most technologically advanced stainless steel production plants in Southeast Asia.