Outokumpu's second quarter 2009 - difficult market with some signs of
improvement, operating loss de
(Thomson Reuters ONE) - Press releaseJuly 23, 2009 at 9.05 amHighlights- Operating loss EUR 94 million- Deliveries and prices low but higher than in the first quarter- Cost saving programmes progressing ahead of scheduleGroup key figures, EUR million II/09 I/09 II/08Sales 617 679 1 549Operating profit -94 -249 174Profit before taxes -105 -252 166Net profit for the period -87 -187 56Earnings per share, EUR -0.48 -1.04 0.31Net cash generated from operating activities 23 301 103Stainless steel deliveries, 1000 tons 268 247 391Stainless steel base price, EUR/t 1) 1 117 925 1 307Stainless steel transaction price, EUR/t 1 751 1 818 3 1951) CRU: German base price (2mm cold rolled304 sheet)Stainless steel demand continued to be low during the second quarterof 2009 reflecting the global economic downturn. There was, however,a slight improvement compared to the first quarter of the year. Itseems that the reduction of inventories by distributors and end-usershas ended. Also the recent increase in the price of nickel hastriggered some purchasing activity. However, there is no majorimprovement in the underlying demand for stainless steel.Similarly to other producers of stainless steel, Outokumpu continuedto cut back production at all of the Group's production units.Capacity utilization during the second quarter was approximately 60%.Outokumpu's deliveries were 268 000 tons, 31% lower than in thesecond quarter of 2008. Compared with the first quarter of this yeardeliveries increased by 9%. Also base prices improved from the firstquarter. Compared with a year-ago they were down by 15%. Transactionprices, which also include raw material costs, dropped even more by45% compared with the second quarter of 2008. Raw material priceshave risen strongly from the beginning of this year but are far fromthe levels in 2008. The second-quarter average price for nickel was50% lower and for ferrochrome 64% lower than the previous year.Consequently, Outokumpu's sales in the quarter totalled EUR 617million, which is as much as 60% lower than in 2008.Outokumpu's operating profit was negative at EUR 94 million mainlydue to the very low delivery volumes. The operating loss was,however, clearly smaller than the first quarter loss of EUR 249million. The improving price and volume trends as well as thebenefits from the cost saving programmes had a positive impact on theunderlying profitability. Additionally, there were no majorraw-material related inventory losses, which burdened the firstquarter operating profit by some EUR 110 million. Operating cash flowremained positive despite continued losses as the decrease ininventory levels in Outokumpu's supply chain released cash fromworking capital. Balance sheet remained strong: gearing stood at 37%at the end of June.Outokumpu's cost saving programmes are proceeding ahead of schedule.The total fixed cost savings are estimated to be EUR 150 million in2009. To reflect the somewhat increased order intake Outokumpu willincrease its production capability after the summer vacation period.Temporary layoffs for some 700 employees at the Tornio plant inFinland will be adjusted accordingly.Due to temporary production constraints, maintenance breaks andseasonality of demand, delivery volumes in the third quarter areestimated to be somewhat below the level of the first quarter (247000 tons). Outokumpu's underlying operational result in the thirdquarter is estimated to be at the same level or somewhat better thanin the second quarter.CEO Juha Rantanen:"Despite the continued rather heavy operating loss, the secondquarter brought some signs of improvement. During the quarter we sawa slight increase in the order intake for stainless steel and we wereable to increase base prices. The recovery in demand is a function ofdestocking coming to an end and there is no major improvement in theunderlying demand for stainless steel from end-users. Outokumpu'smanagement will continue to maintain a tight focus on cash flow,sales and cost-saving actions. This will have an increasing impact inlate 2009. It is our ambition to reach a break-even operating profittowards the end of the year."This press release is a summary of Outokumpu's official secondquarter 2009 report.For further information, please contact:Päivi Lindqvist, SVP - Communications and IRtel. +358 9 421 2432, mobile +358 40 708 5351paivi.lindqvist(at)outokumpu.comIngela Ulfves, VP - Investor Relations and Financial Communicationstel. +358 9 421 2438, mobile +358 40 515 1531ingela.ulfves(at)outokumpu.comEsa Lager, CFOtel +358 9 421 2516esa.lager(at)outokumpu.comOUTOKUMPU OYJCorporate ManagementIngela UlfvesVice President - Investor Relations & Financial Communicationstel. + 358 9 421 2438, mobile +358 40 515 1531ingela.ulfves(at)outokumpu.comwww.outokumpu.comhttp://hugin.info/3010/R/1330422/314467.pdfThis announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 23.07.2009 - 08:05 Uhr
Sprache: Deutsch
News-ID 3883
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