Swedish specialty steelmaker Svenskt Stal AB has announced third quarter financial and operational results. Highlights are:
Third quarter
1. Sales fell by 48% to SEK 6,936 against SEK 13,399 million
2. Operating profit of SEK -936 against SEK 2,640 million
3, Profit after financial items of SEK -1,098 against SEK 2,734 million
4. Profit after tax of SEK -746 against SEK 1,943 million
5. Operating cash flow of SEK 1,026 against SEK 1,344 million
6. Net debt equity ratio was 52%, unchanged from Q2
Nine months
1. Sales declined by 48% to SEK 21,554 against SEK 41,266 million
2. Operating profit of SEK -2,022 against SEK 8,537 million
3. Profit after financial items of SEK -2,409 against SEK 8,112 million
4. Profit after tax of SEK -1,229 against SEK 5,675 million
5. Operating cash flow of SEK 4,069 against SEK 6,670 million
6. The return on capital employed for the most recent twelve month period was negative (17%) and the return on equity was 0 (22%).
Mr Olof Faxander president & CEO of SSAB said that "The demand for steel has shown signs of some recovery during the third quarter. This is largely a result of the completion of destocking rather than an improvement in the market situation for our customers. Our deliveries have increased by 21% as compared with the second quarter, but this is nevertheless lower than the same quarter of last year. The largest increase is from SSAB North America, which once again reports positive earnings and continued positive cash flow. Production in the Swedish plants has resumed after the extended summer outage. We have full production at our facilities in the United States and believe this will continue during most of the fourth quarter."
He added that "The cost savings program introduced in December 2008 continues at a pace which is somewhat faster than originally planned. During the first three quarters, the program produced an effect of slightly more than SEK 500 million and will provide additional effects gradually during the rest of the year. Commencing in 2010, the program is expected to generate annual savings of SEK 1 billion. Reduction of inventory and other working capital with more than SEK 5 billion enabled an operating cash flow for the first three quarters of SEK 4 billion."
He said that "Our investment strategy remains unchanged, however, the pace of investments is temporarily slowed down and the timing is continuously reviewed. In total, capital expenditures during 2009 are anticipated to be at a level of SEK 2 billion, primarily for further development of production of quenched steels in Borlänge and Mobile. Of the SEK 5.3 billion program adopted, there are binding undertakings of approximately SEK 1.5 billion. The timing of the remainder is under evaluation. In the environmental area, during the third quarter, SSAB increased its goal of decreasing discharges of carbon dioxide from production. SSAB is now a core member of the European cooperation project, ULCOS, with the goal of eventually reducing by half the carbon dioxide discharges from steel production."
