SSAB abandons talks with Tata Steel for IJmuiden acquisition, reports net loss for 2020

Friday, 29 January 2021 12:28:41 (GMT+3)   |   Istanbul
       

Swedish specialty steel producer SSAB has announced that it has concluded discussions regarding a potential acquisition of Tata Steel Europe's steel mill in IJmuiden in the Netherlands and has decided not to acquire the plant. The company stated that the acquisition of Ijmuiden would be difficult for technical reasons. Martin Lindqvist, CEO of SSAB, said that they cannot align the IJmuiden plant with their sustainability strategy in the way desired and that the acquisition would not meet their financial expectations.

SSAB said that it is leading the transformation of the steel industry to fossil-free production. The group’s goal is to be the first in the world, in 2026, to supply fossil-free steel to the market and to be a fossil-free company by 2045. The rationale behind the discussions concerning Tata Steel IJmuiden was based on SSAB’s customers’ clear desire for a strong supplier of a broad range of fossil-free steel. This has also been about creating synergies between existing operations in the Nordic countries and in IJmuiden and getting closer to the European market.

In the fourth quarter of 2020, SSAB had announced that it was in discussions with Tata Steel concerning a possible acquisition of the IJmuiden plant, as SteelOrbis previously reported. 

SSAB has also posted its financial results for 2020, reporting a net loss of SEK 490 million ($58.56 million), compared to a net profit of SEK 1.28 billion in 2019. The company’s sales revenues amounted to SEK 65.39 billion ($7.81 billion) in 2020, decreasing by 14.5 percent year on year. In the same period, the company reported an operating loss of SEK 325 million ($38.85 million) compared to an operating profit of SEK 2.16 billion recorded in 2019. SSAB stated that the results were affected by a weak market as a consequence of Covid-19.

Meanwhile, SSAB’s crude steel output in 2020 dropped by 1.2 percent to 7.53 million mt, while its finished steel production stood at 6.94 million mt, down by 0.7 percent, both year on year. Its steel shipments in the given period went down by 1.5 percent year on year to 6.46 million mt. 

SSAB foresees that demand for steel during the first quarter of 2021 will be good, driven by customer restocking. Nevertheless, there is still uncertainty as to how the development of the coronavirus will affect demand. Global demand for high-strength steel is estimated to be good during the first quarter. As for SSAB Americas, shipments during the first quarter of 2021 are expected to continue at a good level.


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