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VIENNA, Nov 11 (Reuters) - Austrian specialty steel and car parts maker Voestalpine on Wednesday reported a drop in second-quarter operating profit and said uncertainty over the health of China’s economy had increased risks significantly.
Earnings before interest and tax (EBIT) in the three months to end-September fell 44 percent to 206.8 million euros ($222.1 million) compared with the previous quarter, slightly above analysts’ average forecast of 192 million euros in a Reuters poll.
“Whereas the recent -- mostly stable -- macroeconomic trends in most parts of the world continued in the first half of the business year 2015/16, increasing uncertainties regarding the further development of the Chinese economy became apparent,” the company said in a statement.
While the economic backdrop in Brazil and Russia “continues to be precarious”, a global weakness in energy markets had also become increasingly evident, Voestalpine added.
China accounts for half of global steel consumption but the country’s slowing economy has curbed demand for the alloy and consumption fell 3.3 percent last year -- the first decline since 1981 -- and has continued to fall this year.
Voestalpine confirmed that it expects full-year core and operating profit to exceed last year‘s, but added that on an adjusted basis they were now expected to come in below last year’s levels due to the challenging market environment.
$1 = 0.9311 euros Reporting by Karin Strohecker; editing by Francois Murphy and Louise Heavens