SSAB's half-year financial report for 2017 indicates continued earnings improvement.
The quarter:
- Sales were SEK 17,115 (14,471) million
- Operating profit before depreciation/amortization was SEK 2,167 (1,509) million
- Operating profit was SEK 1,205 (592) million
- The result after financial items was SEK 914 (349) million
- Earnings per share were SEK 0.86 (0.53)
- Operating cash flow was SEK 1,069 (1,151) million
- Net debt/equity ratio was 30% (37%)
Comments by the CEO
SSAB’s operating profit increased to SEK 1,205 million for the second quarter of 2017. The improvement compared with the previous quarter was driven primarily by higher realized prices in SSAB Europe and SSAB Americas. SSAB Special Steels contributed to improved earnings through better capacity utilization and increased shipments, but this was partly offset by production disruptions at the steel mill in Oxelösund.
SSAB Special Steels’ shipments continue to grow driven by customer demand for increasingly lighter and stronger products. Demand was good in most segments during the second quarter and the outlook ahead is considered to be stable.
SSAB Europe had a strong quarter, with good underlying demand. Realized prices improved and growth within the Automotive segment remained high. Market prices of steel and raw materials weakened during the quarter. Continued good demand is expected during the third quarter.
In North America, the realized prices for SSAB Americas increased during the quarter, which resulted in improved margins. The costs of the planned maintenance outage in Mobile impacted negatively on earnings and also resulted in somewhat lower shipments compared to the previous quarter, while the underlying demand was relatively stable.
SSAB’s target to reduce net debt by SEK 10 billion between the end of the first quarter of 2016 and the end of 2017 is progressing according to plan. Net cash flow during the quarter was SEK 597 million. An additional SEK 1.7 billion will be achieved during the second half of the year, which is planned to be realized through cash generated from operations and structural reduction in working capital.
We have now entered the next phase in our ”Taking the Lead” strategy, having last year created a platform for profitable growth. We have set clear targets for 2020 for our growth initiatives for high-strength steels and service. Development during the second quarter is well in line with our long-term goals. Another focus area is to constantly drive efficiency through continuous improvements in all our operations. Our goal is industry-leading profitability.
HYBRIT, our long-term initiative for a sustainable fossil-free steel industry, received financial support during the first quarter from the Swedish Energy Agency and during the second quarter we set up a joint venture with LKAB and Vattenfall to take the project forward.
