Sweden’s SSAB boosts Q2 earnings by 44% on higher prices
Swedish steelmaker SSAB posted a 43.61% year-on-year jump in its April-June earnings in 2017, primarily due to higher steel prices, the company said on Thursday July 20.
SSAB’s earnings before interest, taxes, depreciation and amortisation (Ebitda) reached SKr2.17 billion ($261.16 million) in the second quarter this year, up from SKr1.51 billion ($181.86 million) in the corresponding period in 2016, it said.
Higher prices resulted in the improved performance of SSAB’s European divisions, Tibnor and SSAB Special Steels.
The company’s sales increased by 18.27% year-on-year to SKr17.12 billion ($2.06 billion) in the second quarter.
Divisional performance
Ebitda at SSAB Special Steels rose by 59.66% year-on-year to SKr495 million ($59.66 million) in the second quarter of 2017, up from SKr410 million ($49.41 million) in the same period in 2016. Improved earnings were primarily driven by higher prices, higher volumes and lower fixed costs, SSAB said.0
The division’s sales increased by 21.63% year-on-year to SKr4.13 billion ($498.10 million) in the period, while shipments moved up 10% year-on-year to 304,000 tonnes.
Crude steel production fell by 20% year-on-year due to the unplanned two-week outage at the company's Oxelösund steel mill.
SSAB Europe reported a significant Ebitda increase in the second quarter, to SKr1.38 billion ($166.43 million). This was up from SKr679 million ($81.83 million) in the corresponding quarter of 2016.
The European results also improved due to higher prices, positive currency effects and better capacity utilisation rates – although the positive impact was partially offset by higher costs and lower volumes.
“SSAB Europe had a strong quarter, with good underlying demand. Realised prices improved and growth within the automotive segment remained high,” the company said.
The unit’s sales increased by 25.64% year-on-year to SKr8.38 billion ($1.01 billion), while external shipments of steel during the period were down by 2% year-on-year to 991,000 tonnes.
SSAB Americas showed an Ebitda drop of 34.95% year-on-year to SKr201 million ($24.22 million), primarily due due to higher raw materials costs and lower volumes, the impact of which was partly offset by higher prices.
The division’s sales rose by 10.45% year-on-year to SKr3.14 billion ($378.18 million) in the second quarter. External shipments of steel during the quarter were down by 14% year-on-year to 452,000 tonnes due to planned maintenance outage.
Ebitda at the company’s Nordic and Baltic Sea distribution arm Tibnor increased to SKr88 million ($10.61 million) in the April-June of 2017, up by 46.67% year-on-year.
The division’s sales rose by 13.02% year-on-year to SKr2.06 billion ($247.90 million). Sales rise was triggered by higher prices, while shipments dropped by 4% year-on-year.
Finally, Ruukki Construction reported Ebitda of SKr97 million ($11.69 million) in the second quarter of 2017, down by 14.91% year-on-year, due to lower margins, which was partly offset by higher volumes.
However, the division’s sales increased by 6.02% year-on-year to SKr1.53 billion ($184.51 million).
Outlook
SSAB’s target of reducing its net debt by SKr10 billion ($1.21 billion) between the end of the first quarter of 2016 and the end of 2017 “is progressing according to plan”, the company said.
It plans to achieve about SKr1.7 billion ($204.88 million) of net cashflow during the second half of 2017.