Vesuvius adopts cautious outlook as sales, profits weaken

(Sharecast News) - Vesuvius adopted a cautious stance on Thursday, after it warned that the introduction of tariffs on an already under-pressure global steel market could curb profits. Posting full-year results, the firm - a specialist in molten metal flow engineering and technology - said revenues fell nearly 6% in 2024 to £1.8bn, or by 2% once the impact of currency fluctuations had been stripped out.

Earnings before interest, tax and amortisation declined 6% to £188m, while headline basic earnings per share were 43.3p, down 7%.

Vesuvius said a "difficult market background" had affected both its steel and foundry units.

Patrick Andre, chief executive, said: "This has been a challenging year for Vesuvius, with foundry markets in Europe, North Asia and the Americas weakening significantly, and global steel production outside of China negatively affected by the sharp increase of Chinse steel exports.

"Despite this, thanks to significant cost-cutting, resilient pricing and market share gains, we have delivered a robust performance, maintaining our results at the level of 2023 on an underlying basis."

Looking to the current year, however, Andre acknowledged that the difficult geopolitical climate, including the imposition of tariffs, could hit profits.

He said: "While we remain confident in our own performance, we are cautious on market conditions, due to the uncertain economic environment arising from the negative impact of trade tariffs - which continue to evolve - geopolitical volatility and the continuing structural weakness of steel and foundry markets in Europe.

"We currently anticipate that our trading profits in 2025 will be at a broadly similar level to 2025 on a constant currency basis."

Cashflow, however, was forecast to be "significantly" ahead of 2024, boosted by a focus on working capital and reduced capital expenditure.

Jefferies, which has a 'buy' rating on the FTSE 250 stock, said: "Management again executed well in a challenging market. Net debt was higher than [our estimates] but the balance sheet is in good shape.

"Despite some positive macro developments, management again guides cautiously, which will likely see the 2025 full year consensus trading profit more lower, possibly by mid to high single digits."

As at 1045 GMT, shares in Vesuvius were largely flat at 409.5p.