Finkl Steel could be spun off from Swiss parent

Finkl Steel, a specialty steel producer with melt shops in Chicago and Canada, may be spun off by its current parent company, Swiss Steel Group, Lucerne, Switzerland.

“Finkl Steel will not be integrated into the [Swiss Steel] Group and a divestiture is under study," Swiss Steel says in comments accompanying its most recent earnings report. "Until further notice, Finkl will continue to operate as a standalone investment.”

Finkl Steel supplies forging die steels, plastic mold steels, die casting tool steels and custom open-die forgings. The company operates two recycled-content electric arc furnace (EAF) steel mills: one in Chicago and the other in Sorel-Tracy, Quebec.

Swiss Steel has issued several recent earnings reports likely considered disappointing by investors, and already has engaged in divesting itself of other assets, predominantly within Europe.

In its most recent earnings report, in addition to referring to Finkl, Swiss Steel writes in part, “In the course of 2023, Swiss Steel Group successfully divested seven distribution entities in Eastern Europe, as well as its distribution entity in Chile and the Group’s share in the joint venture Shanghai Xinzhen Precision Metalwork.

“The Group has entered a binding agreement to sell its former headquarters in Düsseldorf, [Germany], with the transaction expected to be closed in the first half-year of 2024. The contemplated divestment of parts of Ascometal France, as announced in December 2023, has not yet materialized, as the involved parties are still discussing options and have not reached a final agreement at this stage.”

For the first quarter of 2024, Swiss Steel has reported an earnings before interest, taxes, depreciation and amortization (EBITD) loss of 102 million euros ($111 million).

“Revenue decreased across all major geographical markets,” Swiss Steel says in comments accompanying its first quarter 2024 earnings report. “The Engineering Steel Division, our largest division in terms of sales volume, was particularly affected by the weak demand from automotive production and the contractions in the mechanical and plant engineering sectors.”