Outokumpu's first quarter 2010 - demand for stainless recovering, return to profit in sight
(Thomson Reuters ONE) -
PRESS RELEASE
April 27, 2010 at 9.10 am
Highlights
-Operating profit EUR -22 million, underlying operational result some EUR -32
million
-Improving demand, deliveries increased 35% from the first quarter of 2009
-Second quarter operational result expected to be positive
-Ferrochrome investment study reinitiated, Finnish Government positive on
Fennovoima nuclear power initiative
Group key figures, EUR million I/10 I/09 IV/09
---------------------------------------------------------------
Sales 916 679 728
Operating profit -22 -249 -29
Profit before
taxes -33 -252 -36
Net profit for the
period -21 -187 -6
Earnings per share,
EUR -0.12 -1.04 -0.04
Net cash generated from operating
activities -86 295 -108
Stainless steel deliveries, 1000
tons 333 247 277
Stainless steel base price, EUR/t
1) 1 235 925 1 297
Stainless steel transaction price,
EUR/t 2 329 1 818 2 346
1) CRU: German base price (2mm cold rolled
304 sheet)
The demand for standard grades of stainless steel has recovered to some degree
in 2010 compared to late 2009. The good order intake from the beginning of the
year has continued. The increased demand reflects both increase in distributors'
inventories and improved demand from end-users. There are also initial signs of
increased activity in investment-driven customer-segments, but this has not yet
materialised in major orders.
Outokumpu's deliveries of stainless steel increased by 35% to 333 000 tonnes in
the first quarter compared to the first quarter of 2009. Also prices have
recovered strongly. Base prices increased on average by 34% and transaction
prices, which also include raw material costs, were 28% higher. Raw material
prices have soared from their year-ago levels, nickel was on average 91% higher
and ferrochrome 28%. As a result, Outokumpu's sales grew 35% to EUR 916 million
in the first quarter.
Despite the positive development, Outokumpu's delivery volumes were still
clearly lagging its full production capacity. Capacity utilisation was
approximately 75%. Higher volumes and recovered base prices did however reduce
the Group's underlying operational loss from EUR 134 million in the first
quarter of 2009 to EUR 32 million in the first quarter of this year. Operating
loss was reduced even more from EUR 249 million to EUR 22 million as this year's
first-quarter includes EUR 10 million of raw-material related inventory gains
compared to losses of EUR 110 million the year before.
Outokumpu is now gradually increasing its production and delivery volumes in the
second quarter are expected to be at the same level or somewhat higher than in
the first quarter. Outokumpu's underlying operational result in the second
quarter is expected to be somewhat positive.
In late March Outokumpu made a decision to update the feasibility study on an
investment that would double its ferrochrome production capacity in Tornio,
Finland to 530 000 tonnes. This EUR 420 million investment project was
originally announced in June 2008, but was postponed in December of the same
year due to the financial crisis and market uncertainty.
The Finnish Government has announced its support for the Fennovoima nuclear
power initiative. Outokumpu has about 10% ownership in Fennovoima, which would
enable the Group to get electricity at production cost according to its
ownership. Fennovoima's plan is to have the nuclear reactor in operation by
2020. Final decision on the licence to build the reactor will be made by the
Finnish Parliament later this year.
CEO Juha Rantanen:
"After a very difficult period we can finally see a clear change for the better.
Even though there was no improvement in profits in the first quarter, demand and
delivery volumes were up. The profit improvement will follow in the second
quarter. This recovery gives us the confidence to begin reconsidering our
investment projects. Expanding our ferrochrome production was a very attractive
project which the financial crisis forced us to put on hold. As the worst of the
crisis is behind us and ferrochrome markets have become attractive again, it is
time to take a new look at this investment. The Finnish Government's position on
the Fennovoima nuclear power initiative is favourable to the overall investment
consideration."
This press release is a summary of Outokumpu's official first quarter 2010
report.
For further information, please contact:
Päivi Lindqvist, SVP - Communications and IR
tel. +358 9 421 2432, mobile +358 40 708 5351
paivi.lindqvist(at)outokumpu.com
Ingela Ulfves, VP - Investor Relations and Financial Communications
tel. +358 9 421 2438, mobile +358 40 515 1531
ingela.ulfves(at)outokumpu.com
Esa Lager, CFO
tel +358 9 421 2516
esa.lager(at)outokumpu.com
OUTOKUMPU OYJ
Outokumpu is a global leader in stainless steel with the vision to be the
undisputed number one. Customers in a wide range of industries use our stainless
steel and services worldwide. Being fully recyclable, maintenance-free, as well
as very strong and durable material, stainless steel is one of the key building
blocks for sustainable future. Outokumpu employs some 7 500 people in more than
30 countries. The Group's head office is located in Espoo, Finland. Outokumpu is
listed on the NASDAQ OMX Helsinki.
www.outokumpu.com
[HUG#1408349]
ENG Q1 2010 media release: http://hugin.info/3010/R/1408349/361076.pdf
Unternehmensinformation / Kurzprofil:
Datum: 27.04.2010 - 08:10 Uhr
Sprache: Deutsch
News-ID 19724
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Town:
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Kategorie:
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