SSAB posts further strong quarterly earnings

SSAB today presented its results for the first half of 2005. Profit after financial items for the second quarter was largely uncharged compared with the record profit posted for the first quarter and amounted to SEK 1,748 (921) million. Half year profit thus increased by SEK 1,937 million till SEK 3,540 (1,603) million. - A contributory cause to the strong earnings was that sales of the Group’s core niche products, quenched steels as well as extra and ultra high-strength sheet, remained strong during the second quarter, growing thus far this year by 12% compared with last year. Here we perceive continued good growth possibilities, notes CEO Anders Ullberg in a comment on the report. - The primary reason for the increase in earnings was, however, the price increases that we were able to carry out last year and during the first quarter of this year, which have improved the margins in the steel operations despite steep increases in raw materials costs, continues Anders Ullberg. - The strong cash flow during the second quarter, almost SEK 1,300 million, is also noteworthy. Thus, including the SEK 1,425 million that we received at the beginning of the year from last year’s sale of SSAB HardTech, we have generated a cash flow of almost SEK 3,300 million. Of this amount, SEK 2,850 million has been distributed to the shareholders as dividends and through the redemption programme that we have carried out, emphasises Anders Ullberg. - We see no particular change in the underlying steel consumption in Western Europe and the US. On the other hand, the rate of growth in China appears to be increasing. The market has, though, gradually become more supply-driven and we experienced some downward pressure on prices during the second quarter. During the quarter, our prices have been largely unchanged in local currencies but we have been forced to accept price reductions of 8% for the third quarter, states Anders Ullberg in conclusion.