Year-end report 2018: Continued earnings improvement, strong cash flow and proposed higher dividend
The fourth quarter · Sales were SEK 19,251 (17,017) million · Operating profit before depreciation/amortization and items affecting comparability was SEK 1,971 (1,782) million · Operating profit excluding items affecting comparability was SEK 1,035 (843) million · Operating profit including items affecting comparability was SEK 1,007 (843) million · Earnings per share were SEK 0.67 (0.32) · Operating cash flow was SEK 1,960 (2,976) million · Net debt/equity ratio was 14% (22%) · The Board proposes a dividend of SEK 1.50 (1.00) per share
Comments by the CEO
SSAB’s operating profit for the fourth quarter of 2018 was SEK 1,035 million. The result rose by SEK 192 million, despite significantly higher maintenance costs compared to the fourth quarter of 2017. The improvement was mainly attributable to SSAB Americas. Operating profit was down quarter on quarter, primarily due to planned maintenance outages.
SSAB Special Steels saw continued strong demand in most segments. During the quarter we took the decision to prolong the planned maintenance outage in Oxelösund and increase preventive maintenance efforts, given the disruptions that occurred earlier in the year. This impacted shipments and costs negatively during the quarter but creates better conditions for more stable production going forward. The operating result was SEK -72 (641) million for the fourth quarter.
Demand in Europe was good, but showed a seasonal downturn towards the end of the fourth quarter. SSAB Europe’s shipments were down somewhat compared with the fourth quarter of 2017, but premium products accounted for a higher share of sales. Operating profit for the fourth quarter rose to SEK 733 (460) million.
SSAB Americas’ operating profit was SEK 553 (-15) million for the fourth quarter. This improvement was driven primarily by higher prices but was negatively impacted by the planned maintenance outage in Montpelier. Demand remained strong in most segments.
During 2018, we continued with our plan towards the strategic growth targets set for 2020. A key point in our strategy is to improve the product mix and to achieve a steadier development over business cycles. In operations, our top priority is to create a more stable production and a safer workplace. Resources are being focused on preventive measures and we are intensifiying our work on continuous improvement and lowering working capital.
The political turbulence surrounding trade barriers and somewhat weaker leading economic indicators create some uncertainty regarding future steel demand. At the same time, since we continue to see positive signals from a number of larger customer segments, we expect the outlook to be relatively good for the first quarter of 2019. Cash flow was strong during 2018 and we reduced our net debt by SEK 3 billion. The Board proposes increasing the dividend to SEK 1.50 (1.00) per share. We expect to continue to generate strong cash flow.
Invitation to SSAB’s year-end report 2018 results briefing
SSAB invites you to a presentation of the year-end 2018 report today at 9.00am CET. The press conference will be held in English and live webcast on SSAB’s website www.ssab.com. It is also possible to participate in the briefing via telephone.
Venue and time of briefing: World Trade Center (WTC) Stockholm, Kungsbron 1, Conference room Manhattan, 09.00am CET.
+46 8 505 564 74 (Sweden),
+44 203 364 5374 (UK),
+1 855 753 2230 (USA).
Link to webcast: Go to webcast
For further information, please contact:
Investor Relations: Per Hillström, Head of IR,
email@example.com, +46 70 2952 912
Media: Viktoria Karsberg, Head of Corporate Identity and Communications,
firstname.lastname@example.org, +46 8 4545 734
This information is inside information that SSAB AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and information that SSAB AB (publ) is obliged to make public pursuant to the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, at 7.30am CET on January 29, 2019.