On April 27, Finland-based stainless steel producer Outokumpu announced its financial results for the first quarter of this year, reporting an operating profit of €3 million improving compared to a loss of €71 million recorded in the previous quarter and down from €33 million recorded in the same quarter of 2011.
The company's net profit for the January-March period was €12 million, increasing compared to the net loss of €118 million in the fourth quarter of 2011 and down from the net profit of €16 million in the same period last year. Meanwhile, Outokumpu's sales came to €1.3 billion in the first quarter, down from €1.4 billion recorded in the same quarter last year and up compared to €1.12 billion in the previous quarter.
According to Outokumpu's statement, the stainless steel markets clearly improved in the first quarter. Improved demand for standard grades of stainless steel in the first quarter was supported by restocking among distributors. At the beginning of the second quarter, underlying demand has remained relatively stable.
Outokumpu's deliveries in the first quarter increased 25 percent compared to the previous quarter to 418,000 mt. Based on the current level of order intake, Outokumpu's external delivery volumes (stainless and ferrochrome) in the second quarter of 2012 are expected to be approximately at the same level as in the first quarter. In addition, as a result of the recent decline in the nickel price and a weaker product and geographic mix in the second quarter, Outokumpu's average base prices for stainless steel in the second quarter are expected to be flat or slightly lower than in the first quarter.
Meanwhile, Outokumpu also announced that it plans to cut 150-200 jobs in general stainless and certain functions in Tornio as well as at the group's Terneuzen unit in the Netherlands in order to increase efficiency and reduce costs. The company said it expects the majority of the planned job reductions to take place in Finland.
The statutory negotiations with employee representatives are estimated to start in June, and the planned job reductions are expected to take place by the end of September.