Austrian-based voestalpine has become less optimistic over the last three months regarding Europe’s economic outlook. Earlier signs of stability, or even “upward trajectory” have since faded, it says.

Announcing its first-half results, the company notes that, “the slight upward trend in the construction, mechanical engineering, and electrical industries that persisted until the summer has not continued in the last few months – at least [not] in Europe”.

Meanwhile, the US economy remains strong, and China is keeping growth stable at 7% for the year, meaning voestalpine's special steel division fared well with US and Asian orders. The economies of Brazil and Russia, however, continue to shrink.

Worldwide, the oil and natural gas sectors are still very favorable, especially with the recent awards of major pipeline projects: “The automotive industry is [also] marked by continuing demand, and the situation in the aviation and railway infrastructure industries is similar”, it adds.

Thus, voestalpine’s (carbon) steel division, which sells mainly in Europe, enjoyed continuing high demand from carmakers, and a recovery in oil and gas pipeline projects. In the automotive parts business segment, the metal forming division continued its very good performance, but faced a subdued market in Europe for tubes and sections since Q2.

The conventional energy-generation industry remains weak, and while the consumer and white goods industries are stable, agricultural machinery is trending significantly weaker, says voestalpine.

However, even if Europe’s economic framework is now worse than expected, voestalpine still believes all four of its divisions will operate at “practically full capacity in the second half of its business year 2014/15”. Voestalpine should “at least slightly improve profitability compared to the previous year, even without taking extraordinary income into account,” the company concludes.

• Group revenue fell 1.5% to €5.56 billion in voestalpine’s H1, because of closing the company’s standard rail production in Duisburg late 2013, and the resulting decrease in the metal engineering division's delivery volumes. Other negative factors were weaker prices in some business segments because of falling raw materials costs. The group's significantly higher operating result (ebitda), up by 11.2% to €757m, includes non-recurring effects in the metal forming division totaling €66.5m. Adjusted for these non-recurring effects, ebitda rose 1.5% to €690m y-on-y.