Finnish steelmaker Outokumpu has said that, based on its financial performance in the first two months of the quarter, its fourth quarter 2010 is expected to be weaker than indicated in the third quarter interim report, pointing out that its fourth quarter underlying operational result is now expected to be clearly negative instead of around break-even.
Commenting on the situation, the company said, "Continued economic uncertainty and closeness of the year-end have increased hesitance among customers, which results in slightly lower than expected delivery volumes and softer base price development for the fourth quarter."
Outokumpu said that it does not intend to restart the postponed investments in Avesta, Sweden, namely the new annealing and pickling line projects, in the foreseeable future. The investments were originally decided in September 2007 and postponed in December 2008.
Thus, Outokumpu will record a €18 million write-down impacting the fourth quarter operating profit as a non-recurring item. Outokumpu's fourth quarter financial income will benefit from a €8.5 million non-recurring gain from the divestment of the shares in Okmetic Oyj in November.