Interim report Q2 2023: Weaker market in Europe, more stable for Special Steels and Americas
July 21, 2023 7:30 CEST 6 min read
The second quarter · Revenue was SEK 31,777 (35,516) million · Operating result was SEK 4,963 (10,390) million · Earnings per share were SEK 3.81 (7.79) · Net cash was SEK 11.7 (7.2) billion · Investment decision for Oxelösund, transition to fossil-free steelmaking progressing to plan
Comments by the CEO
SSAB’s operating result for the second quarter of 2023 was SEK 4,963 (10,390) million. The result decreased compared to last year’s record level primarily because of a weaker market for SSAB Europe, Tibnor and Ruukki Construction, while the results for SSAB Special Steels and SSAB Americas were more stable. Compared with the first quarter of 2023, the result of the Group increased by SEK 230 million. Demand on the European market has weakened and we continued to initiate measures to adjust production, costs and staffing.
SSAB Special Steels’ operating result* was SEK 2,003 (2,373) million and the operating margin was 23% (26%). SSAB Americas’ operating result was SEK 2,642 (3,511) million and the operating margin was 34% (40%). SSAB Europe’s operating result* fell to SEK 764 (4,069) million and the operating margin was 6% (28%).
Safety performance continued to improve and Lost Time Injury Frequency (LTIF) decreased to 1.01 (1.56) in the second quarter.
Demand in Europe has weakened and market prices of steel decreased during the quarter, which affects SSAB after a certain delay. To meet the weaker demand, measures to adjust production, costs and staffing were initiated. The target is to reduce cost by more than SEK 500 million on an annual basis. The measures include temporary and permanent layoffs, use of work-hours banks and restrictions on new hires and other fixed costs. Further measures to adjust costs are ready to be implemented, if the market conditions so require. Customers are showing signs of a more cautious sentiment also on SSAB Special Steels markets. The heavy plate market in North America was stable during the quarter.
*) Adjusted operating result is applied for comparative information, no items affecting comparability were reported in the second quarter of 2023.
Investments in the Nordic production system to remove carbon dioxide emissions, lower costs and strengthen the product portfolio continue according to plan. In order to continue to keep up a high pace and lead to fossil-free transformation, SSAB’s Board has taken the decision to invest SEK 6.2 billion in a new electric arc furnace and raw material handling in Oxelösund. However, the transformation requires final approval for the necessary power line to Oxelösund.
There is strong demand for steel with no carbon dioxide footprint and the focus is on the ramp-up of SSAB’s unique new product, SSAB Zero, with 0.0 kg emissions of fossil carbon dioxide equivalents per kg of steel. During the quarter, SSAB launched a study with Fortum to explore the possibilities of making direct reduced sponge iron in Raahe. The study is expected to complete early next year. During the quarter, SSAB and Ponsse, one of the world’s largest manufacturers of forest machines, signed a fossil-free steel cooperation agreement.
SSAB invites you to a presentation of the report for Q2 2023 at 9.30am CEST on Friday, July 21, 2023.
The report will be presented by SSAB’s President and CEO Martin Lindqvist, and CFO Leena Craelius.
The press conference will be held in English and live webcast on SSAB’s website www.ssab.com.
Link to webcast: https://edge.media-server.com/mmc/p/z2dvvb6r
You can also participate in the briefing by telephone. Click on the link below and complete the online registration form. You can chose if you want to dial in or click “Call Me” for a call-back.
Link to teleconference: https://register.vevent.com/register/BI153cce85193d42efb4a6f43675e77176
For further information, please contact:
Per Hillström, Head of Investor Relations, [email protected], phone: +46 702 95 29 12
Viktoria Karsberg, Head of Corporate Identity and Group Communications,
[email protected], phone: +46 72 233 5288
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 CEST on July 21, 2023.