Vesuvius expects revenues to fall this year

Vesuvius, a molten metal flow engineering company, said it expects its 2013 revenue to fall following restructuring and disposals.

Trading has been broadly flat this year and production of steel and foundry has been affected by difficult market conditions, according to an interim statement Friday.

Production fell 5.0% in Europe and North America in in the first four months of the year, offsetting a 6.4% growth in Asia.

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The company said activity globally in the steel industry remains flat, and indicators in general are still mixed.

The foundry industry was affected by negative trends including lower auto production in Europe, particularly in Germany, and less casting volumes in South America.

Downward pricing pressures also continued to affect the sector. The group is working on improving its position to mitigate the impact and maintain its trading margins.

In March, the group announced the sale of its Precious Metals Processing division to Possehl for €56.8m. The disposal remains on track for completion by the end of this quarter following approval by Possehl's supervisory board.

Since its last results reported at December 31st, there has been no material change in the company's financial position but it expects revenue in 2013 will be lower than in 2012.

"However, we are starting to see the benefits of our self-help restructuring actions coming through and we are confident this will deliver improved trading margins later in 2013," the group said.

Vesuvius said it continued to operate with a strong balance sheet and is maintaining its focus on working capital management.

RD