SSAB profits up despite lower operations
Swedish Steel AB (SSAB), a leading producer of high-strength steel sheet and steel
plate, today reported its nine-month results.
The company's SEK 933 million ($118.8 million) net profit for the third quarter slightly (1.1 percent) exceeded the record result posted last year. However, cumulative net profit for the first nine months jumped 77.1 percent to SEK 4.47 billion ($569.4 million).
SSAB President Anders Ullberg said that the company focused on processing costs, which, for the quarter, were approximately on the same level as last year.
Ullberg added that the cash flow remained very strong due to the increased prices for raw materials and steel products.
SSAB cut back on its sheet and
plate production during the third quarter due to the weaker inflow of orders.
Production for the quarter decreased by approximately 7 percent year on year to 633'000 metric tons. In total, sheet and
plate production during the first nine months dropped approximately 4 percent year on year to 2.31 million metric tons. Crude steel
production during the third quarter fell 3.4 percent to 901'000 metric tons. Nine-month crude steel
production was down 1.2 percent year on year to 3.02 million metric tons.
The company's deliveries from steel operations including slabs, sheet and
plate during the first nine months was 7 percent lower year on year at 2.23 million metric tons. Deliveries of niche products like high-strength sheet and quenched steels for the first three quarters decreased 2.7 percent to 1.17 million metric tons and accounted for 52% of total volume.
SSAB's sales increased by 21 percent year on year to SEK 20.8 billion ($2.65 billion). Higher prices accounted for 28 percentage points, but lower volumes resulted in a decrease of 7 percentage points.
So far in 2005, the company's costs for
iron ore and coal have been 70 percent and 29 percent higher respectively than last year. Processing costs were 3 percent higher than last year. The cost increase is due, among other things, to measures to open up restricted sectors in the flow of quenched steels.
Ullberg estimates that the underlying demand for steel in
Europe will remain almost unchanged compared with last year. Based on the agreements concluded and pending for the fourth quarter, it is estimated that the steel operation's prices in local currencies will, on average, be marginally higher than during the third quarter.