Finland-based stainless steel producer Outokumpu has announced its financial results for the fourth quarter of 2020, registering a net loss of €39 million compared to a net loss of €15 million in the same quarter of the previous year, while the company’s sales revenues in the fourth quarter this year fell by 3.5 percent year on year to €1.35 billion.
In the given period, Outokumpu’s adjusted EBITDA was €78 million, compared to €73 million in the fourth quarter of 2019. The company stated that prices continued to decline in Europe, while planned maintenance had a negative impact on results compared to the previous quarter, but was offset by positive raw material impacts and reduced costs.
In 2020, Outokumpu registered a net loss of €116 million compared to a net loss of €75 million in 2019, while the company’s sales in the full year fell by 11.8 percent year on year to €5.64 billion. The company’s adjusted EBITDA in the given period was €250 million, compared to €263 million in 2019. The company stated that various cost-saving measures supported profitability compared to the previous year.
Outokumpu’s stainless steel deliveries in the fourth quarter this year declined by 14.2 percent year on year to 523,000 mt, while its stainless steel deliveries in 2020 declined by 3.2 percent year on year to 2.1 million mt, as a result of weaker demand.
The company stated that their adjusted EBITDA guidance for the first quarter of 2021 is expected to be higher compared to the fourth quarter of 2020. Outokumpu stated that the stainless steel market has begun to recover after the global downturn caused by the coronavirus pandemic, that stainless steel demand is strengthening and both business areas in Europe and Americas are expected to see a seasonal increase in volumes. The company’s stainless steel deliveries are expected to increase in the first quarter by 10-20 percent compared to the fourth quarter last year.
“We will strengthen our balance sheet and create strong returns. During 2021–2022, we will focus on strict cost and capital discipline. We remain committed to our strategic plan to reach our financial targets of €200 million EBITDA run-rate improvement, and net debt to EBITDA of below three times by the end of 2022,” Heikki Malinen, Outokumpu’s CEO, said.
The company stated that the employee negotiations initiated in November were concluded in December, resulting in headcount reductions as planned and it targets to have a headcount of below 9,000 during 2022 to improve its cost structure in this competitive industry.