Pandemic causes Paul Wurth profits to plummet in 2020
Steel company Paul Wurth saw its profits fall by two-thirds in 2020 compared to the previous year, caused by a slowdown in projects and investments due to the pandemic, the Luxembourg-based company said on Tuesday.
The company’s 2020 net profit from fell to €4.9 million from €14.4 million in 2019, while turnover last year fell by 15.7% to €403.7 million year-on-year.
"The outbreak of the Covid-19 pandemic sharply exacerbated the already strained situation of the steel industry, with subsequent consequences on the steelmakers’ investment activity, on travelling and visits as well as on project execution”, Paul Wurth said in a statement.
The company secured €393 million in orders in 2020, down by 7.7% from 2019. The main reason results did not drop any further was because of two orders agreed by the company's cokemaking segment in the East Asian region, Paul Wurth said.
In April, German engineering company SMS signed an agreement with the Luxembourg government to buy out the remaining 41% of shares in Paul Wurth that SMS did not own. The shares in the 150-year-old Luxembourg steel-plant engineering firm had been owned by the state and state-owned banks.
The sale was driven by SMS's desire to better integrate Paul Wurth as it gears up for a future market in which the steel companies which are its customers are expected to demand the design and construction of plants powered by hydrogen aimed at sharply cutting carbon emissions.
Economy Minister Franz Fayot, whose ministry oversaw the state's Paul Wurth investment, said the decision was made now because SMS was eager to buy.
SMS will use the Paul Wurth facilities in Luxembourg to lead research and development into the company's decarbonisation focus and will build a new headquarters near its current building in Hollerich.
A joint venture between SMS and the state will take over ownership of Paul Wurth's remaining landholdings in Luxembourg, part of which is earmarked to be converted into residential housing.