Voestalpine braces for earnings hit as US tariffs rise to 50%

By Bernadette Hogg and Isabel Demetz

June 4 (Reuters) - Voestalpine VOES.VI expects U.S. tariffs' impact on its yearly earnings to be at the high end of a "mid-double-digit" million euro range if the import duties on steel and aluminium remain at the 50% level that came into effect on Wednesday, its CEO said.

U.S. President Donald Trump's decision to ratchet up steel and aluminium tariffs from the previous 25%, a move condemned by officials and trade unions in the European Union, Australia and Canada, is putting pressure on steel producers globally.

Voestalpine, which predominantly supplies steel for the automotive industry, forecast core earnings (EBITDA) of 1.4 billion to 1.55 billion euros ($1.59 billion to $1.76 billion) for the business year that started on April 1, a small increase from 1.35 billion in a year earlier.

Trump's tariff increase should not impact the newly announced earnings outlook, but it could lead to weaker demand and a drop in capacity utilisation in the United States, CEO Herbert Eibensteiner said during a press conference.

The outlook, which the Austrian group said included a lot of uncertainty due to the trade war, was broadly in line with analysts' average estimate of 1.5 billion euros in an LSEG poll.

Voestalpine's shares were up 3.6% by 1040 GMT.

The speciality steelmaker said that, in addition to trade barriers, its business was being affected by high labour and energy costs, a strict CO2 regime and high levels of bureaucracy.

Voestalpine said that although it welcomed the latest commitments to the industry by the EU and national lawmakers, it saw a lack of concrete actions.

"To secure Europe's competitiveness as a business location, we need a fundamental change in energy, climate, and industrial policy," Eibensteiner said in the annual earnings statement.

Voestalpine in May warned that increased energy costs in Austria were a threat to its competitiveness and called for price relief from the Austrian government.

The Linz-based company also trimmed its dividend to 60 euro cents per share from 70 cents in the previous year.

($1 = 0.8800 euros)