Europe’s largest stainless steel producer Outokumpu delivered 575,000 mt of stainless steel in the third quarter, down 8% quarter on quarter, but up 17.8% from a year ago when the COVID-19 pandemic hit global demand, the company said in a Nov. 4 results statement.
This brought total nine-month stainless steel deliveries to 1.8 million mt, up from 1.6 million mt in the same period last year.
Sales revenues for the quarter increased 55.4% year on year to Eur1.95 billion ($2.2 billion), also up 4.1% quarter on quarter.
Profitability in the third quarter of 2021 was supported by increased realized prices for stainless steel in both Europe and the Americas, as well as higher ferrochrome sales price, Outukumpu said in the results statement.
However, it added that the result was burdened by increased prices driven by the strong COVID-19 rebound, an exceptionally long order book and augmented raw material prices, which offset the higher energy and consumable prices.
Outokumpu reported EBITDA of Eur295 million for the quarter, well above the $10 million reported a year ago and a 32.3% increase from the previous quarter.
The Q3 EBITDA was the best quarter in Outokumpu’s recent history, Outokumpu president and CEO Heikki Malinen said in the statement, adding that the quarter’s stainless steel deliveries were in line with expected seasonal patterns.
“The result is supported by a combination of strong market environment and our own decisive actions in strategy execution,” Malinen said.
The Business area Europe saw deliveries decrease by 13% in the quarter, but it’s EBITDA was Eur149 million, he said.
Meanwhile, the company’s turnaround at its Business area Americas continued to be successful, improving for a fifth consecutive quarter to an EBITDA of Eur84 million, with stainless steel deliveries remaining flat, Malinen said.
He added that the ferrochrome operations performed well, with a Eur64 million addition to the group’s adjusted EBITDA.
“Sustainability is at the core of our operations, and we are continuously taking steps towards our ambitious Science-Based Targets initiative of 1.5 degree emission reduction target,” Malinen said. “In the third quarter, our energy efficiency was at a good level due to high volumes and development projects.”
The company also announced an increased share of wind power in its electricity procurement during the quarter as part of its sustainability journey.
Outokumpu previously committed to reducing emissions by approximately 30% by 2030 compared to the company’s 2020 level.
The company expects its overall steel deliveries in the fourth quarter to remain stable from the third quarter, while adjusted EBITDA in the fourth quarter is forecast to be higher quarter on quarter.is expected to be at a similar level as in Q2.
“We are well on track with our strategy execution, targeting a Eur200 million EBITDA run-rate improvement by the end of 2022,” Malinen said. “Given the strong momentum, we decided to increase the target by Eur50 million to Eur250 million by the end of 2022.”
— Jacqueline Holman