Finland-based stainless steel producer Outokumpu has announced its financial results for the third quarter of the current year, registering a net loss of €63 million compared to a net loss of €27 million in the same quarter of the previous year, while the company’s sales revenues in the third quarter this year fell by 21.3 percent year on year to €1.25 billion.
In the given period, Outokumpu’s adjusted EBITDA was €22 million, compared to €45 million in the third quarter of 2019. The company stated that realized prices declined in Europe, but that lower input costs supported profitability, while planned maintenance had a negative impact on results compared to the third quarter of 2019.
In the first nine months of the current year, Outokumpu registered a net loss of €78 million compared to a net loss of €60 million in the same period of the previous year, while the company’s sales in the first nine months fell by 14.2 percent year on year to €4.29 billion. The company’s adjusted EBITDA in the given period was €172 million, compared to €190 million in the first nine months of 2019. The company stated that the lower ferrochrome benchmark price had a negative impact on profitability in the given period, compared to the previous year.
Outokumpu’s stainless steel deliveries in the third quarter this year declined by 8.4 percent year on year to 488,000 mt, while its stainless steel deliveries in the first nine months this year declined by eight percent year on year to 1.6 million mt.
The company stated that their adjusted EBITDA guidance is expected to remain at the same level in the fourth quarter compared to the third quarter. Outokumpu expects the stainless steel industry to be significantly affected by coronavirus pandemic-related uncertainties. The company’s stainless steel deliveries are expected to remain stable in the fourth quarter compared to the third quarter. The maintenance work in Tornio, Finland, is expected to have an approximately €10 million negative impact on the fourth quarter results compared to the previous quarter.
“We will increase raw material efficiency and operational cost savings and limit annual capital expenditure to €180 million in 2021 and 2022 through maintenance optimization and strict asset management. We will also target fixed cost savings through planned restructuring measures,” Heikki Malinen, Outokumpu’s CEO, said.
The company stated that it is starting employee negotiation processes in selected operating countries with the plan to create cost savings by restructuring and reducing total employee headcount by up to approximately 1,000 mostly by the end of 2021. The long products business is undergoing an accelerated turnaround to develop the business internally, the company said.