(Reuters) -Acerinox booked a surprise loss in the second quarter as uncertainty related to U.S. President Donald Trump’s trade war hurt the Spanish steelmaker’s ability to meet forecasts and benefit from planned tax credits in Europe.
Although its U.S.-based business gives Acerinox an edge over other European steelmakers coping with the wave of protectionism and Trump’s 50% tariffs on steel imports, uncertainties related to the trade war are affecting the flow of exports and steel demand.
As a result of the geopolitical turmoil and tariff wars, Acerinox did not meet its forecasts in Europe and booked an impairment of 48 million euros ($56.5 million) on tax credits in the second quarter, it said in a statement on Thursday.
It reported a net loss of 28 million euros, compared to a profit of 62 million euros a year earlier. Analysts polled by LSEG had expected a profit of 43 million euros.
Acerinox’s shares fell 2.6% in the first hour of trading in Madrid.
Tariffs could also cause steeper price declines in Europe, CEO Bernardo Velazquez said in the statement, as imports of Asian material meant for the U.S. market will be diverted towards Europe.
“A substantial increase in steel imports into the EU, often at below-cost prices, creates downward pressure on prices and margins in this market, negatively impacting our operations and profitability in the European region,” he said.
Even though demand in the U.S. remained stable and Trump’s tariffs favour local producers like Acerinox, the company said the ongoing trade negotiations were weighing down the market, as large distributors only replace stocks they sell while awaiting more market clarity.
Acerinox is the largest producer of stainless steel in the United States.
Its adjusted earnings before interest, taxes, depreciation and amortisation fell to 112 million euros in the second quarter, missing analysts’ forecast of 126 million euros.
($1 = 0.8500 euros)
(Reporting by Javi West Larrañaga in GdanskEditing by Tomasz Janowski and Milla Nissi-Prussak)
