On July 24 Finland-based steelmaker Outokumpu announced its interim report for the second quarter of 2007. According to the company's press release, during the period in question the group's operating profit amounted to €406 million, up from €149 million for the same period last year. The figure includes nickel-related inventory gains of €100 million and a €25 million gain from the sale of the Hitura mine.
In April-June 2007, the producer's net profit reached €565 million, an increase from €133 million for the corresponding period of the previous year. The company registered sales of €2.09 billion, compared to €1.39 billion for the second quarter of 2006.
Commenting on the figures, Outokumpu stated, "End-user demand for stainless steel is strong; however, the distributor demand is very weak and is expected to remain as it is over the summer period." Furthermore, the company warned of expected losses in the third quarter of the year, since demand from distributors is weak following the decline in nickel prices in June. Also, the increase in the alloy surcharge in July put pressure on the base price. However, the group's management expects the market for standard products to be back to normal during the fourth quarter.
As a result, Outokumpu's operational result for the third quarter is foreseen to be positive, but nickel-related inventory losses are expected to give an overall negative figure.