SSAB announces its third quarter 2019 financial results.
- Sales were SEK 18,840 (19,038) million
- Operating profit before depreciation/amortization excluding items affecting comparability was SEK 1,327 (2,563) million
- Operating profit, excluding items affecting comparability, was SEK 300 (1,600) million
- Operating profit, including items affecting comparability, was SEK 150 (1,387) million
- Earnings per share were SEK 0.03 (0.85)
- Operating cash flow was SEK 1,038 (1,922) million
- Net debt/equity ratio was 15% (17%), excluding IFRS 16
Comments by the CEO
SSAB’s operating profit, excluding items affecting comparability, for the third quarter of 2019 was SEK 300 million, down SEK 1,300 million compared with the third quarter of 2018. Lower earnings were primarily attributable to SSAB Europe. Group operating cash flow for the third quarter was SEK 1,038 (1,922) million.
Demand for SSAB Special Steels weakened during the third quarter, primarily in Europe. Shipments were down and operating profit was lower than the same quarter prior year at SEK 358 (536) million. Margins declined during the quarter mainly due to higher iron ore costs.
Demand in Europe was seasonally lower and weaker business conditions meant that the decline was more pronounced than normal. Operating profit for the third quarter fell to SEK -480 (460) million. Exceptional pressure on margins on the European market continued to have a negative impact on third quarter earnings, which were also negatively impacted by the planned mid-term repair of one of the blast furnaces in Raahe. Market prices of iron ore decreased during the latter part of the quarter and will lead to lower raw material costs for SSAB Europe during the fourth quarter.
Third quarter operating profit for SSAB Americas decreased to SEK 522 (790) million, primarily due to lower realized prices. Demand was relatively stable and shipments were up somewhat compared with the previous quarter.
Heading towards the end of the year, we see a more pronounced seasonal slowdown than normal. Several measures were taken already in the third quarter to cut costs across the Group; production rates were reduced on several lines and the smaller blast furnace in Oxelösund was idled, there was a significant reduction of temporary employees, reduced working hours and temporary lay-offs were introduced together with other costs savings measures. To achieve further reductions of cost and capacity, we will idle one of the blast furnaces in Raahe at the end of November. At the same time, our strong balance sheet, low net gearing and limited debt maturities the coming years give us a sound basis to continue to develop SSAB. The HYBRIT initiative, aiming to produce fossil free steel, is proceeding according to plan and is generating a lot of interest among our customers.