Finland-based stainless steel producer Outokumpu's net loss for the first quarter of this year stood at €21 million, compared to a net loss of €4 million in the last quarter of 2009 and up from a net loss of €188 million recorded in the first quarter of 2009.
In the first three months of this year, the company's sales amounted to €916 million, up 15.82 percent compared to the previous quarter and up 34.9 percent year on year, while its EBITDA rose 30.77 percent quarter on quarter, reaching €34 million, up from -€198 million in Q1 2009.
In the given period stainless steel base price stood at €1,235/mt, decreasing by 4.78 percent compared to Q4 2009 and up 33.51 percent year on year. Base prices have been increasing recently and Outokumpu's average base prices for flat products in the second quarter of 2010 are expected to be €50-100/mt higher than the average in the first quarter.
Outokumpu said that 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 restocking as a result of increasing metal prices, and improved demand from end-users. According to the company, there are also initial signs of increased activity in investment-driven customer segments, but this has not yet materialized in major orders. Inventories among distributors in Europe are estimated to be at normal levels.
Commenting on the results, Outokumpu's CEO Juha Rantanen said, "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."