Vesuvius PLC (LSE:VSVS) shares fell on Tuesday after the supplier of steel products and other molten-metal services said its end-markets have continued to weaken during the second half so far.
However, it had warned of this before and said it now expects 2022 results to be “somewhat above expectations”, thanks to pricing, cost cutting and growing market share, though it remains cautious about the effects in 2023 from the continuing inventory reduction expected in the first half.
Analysts are on average forecasting a trading profit of just under £200mln for this year, according to the company’s calculations.
Steel production has been weakening “everywhere except in India”, the FTSE 250-listed group said, with rising energy prices leading many European steel producers to shut down blast furnaces and curtail output from electric arc furnace mills. The impact in North America is less severe so far.
Vehicle markets are showing “slight” signs of improvement but other foundry markets are weakening as the global economy slows, especially in Europe, the Middle East and Africa, where energy price effects are hitting hardest.
“Vesuvius has continued to outperform and gain market share, thanks to the technological differentiation of our products and solutions, resulting from our strong and continued investment into research and development,” it said.
Shares were down 1.54% at 383.40p mid-morning.