Outokumpu turns to loss, foresees lower third-quarter deliveries

Outokumpu expects stainless steel deliveries to decrease -10% on-quarter in the third quarter due to seasonally low demand in Europe and the continued Covid-19 pandemic impact. The firm has accelerated its Long Products segment strategic review under new management.

The European stainless steel market remains challenging as a result of continuing import and price pressure, the steelmaker says. The planned maintenance work at the ferrochrome mill in Tornio, Finland is expected to have approximately €15 million ($17.7m) negative impact on the Q3 result.

Outokumpu’s consolidated Q2 deliveries fell -10% on-year and -11% on-quarter to 523,000 tonnes. Sales were down -17% on-year and -12% on-quarter to €1.4 billion ($1.66 billion), while net result was a €37m loss versus a €6m profit in Q2 2019 and €22m profit in Q1 2020, Kallanish notes.

In business area Americas, deliveries were down -20% on-quarter due to continued distributor destocking and the pandemic. Business area Europe’s result was burdened by lower deliveries, continued price pressure and high import penetration. As a response to lower demand, production has been adjusted with temporary shutdowns and shorter working hours in all operating countries.

Europe segment adjusted Ebitda slumped -59% on-year in Q2 to €30m but Americas segment adjusted Ebitda turned to positive €3m from negative €8m a year earlier.

In the Long Products segment, deliveries dropped -38% on-year to 40,000t, sales were down -36% to €119m and adjusted Ebitda fell to negative €4m from positive €6m a year earlier.

In the Ferrochrome segment, meanwhile, production fell -5% on-year to 123,000t, sales dropped -25% to €95m and adjusted Ebitda fell -23% to €24m.

In the first half of 2020 consolidated deliveries fell -8% on-year to 1.11 million tonnes, with sales down -11% to €3.04 billion. However, net loss halved to €15m.