Q2/2020: Earnings impacted negatively by lower demand, stable performance from Special Steels
The second quarter · Revenue was SEK 15,155 (20,654) million · EBITDA was SEK 705 (2,419) million · Operating profit/loss was SEK -251 (1,316) million · Earnings per share were SEK -0.28 (0.98)
Comments by the CEO
SSAB’s operating result for the second quarter of 2020 was SEK -251 million, down SEK 1,567 million compared with the second quarter of 2019. The steel markets were affected by lower economic activity following the outbreak of Covid-19. Compared with the first quarter of 2020, which was largely unaffected by Covid-19, earnings contracted by SEK 594 million.
SSAB Special Steels’ operating profit was SEK 485 (544) million, lower volumes compared with the second quarter of 2019 had a negative impact. Demand for the special steels business was better than for standard steels and Special Steels’ operating margin amounted to 12% (11%) during the quarter. Compared with the first quarter of 2020, earnings were up SEK 27 million, partly related to cost savings and a good production rate.
The European steel market was characterized by low demand and SSAB Europe’s shipments decreased to 695 (909) thousand tonnes. Lower volumes and the impacts of reduced production pushed earnings down to SEK -566 (66) million.
SSAB Americas’ operating result for the second quarter decreased to SEK -10 (872) million and shipments decreased to 460 (475) thousand tonnes, impacted by weak demand. The second quarter of 2019 was characterized by favorable market conditions with high heavy plate prices.
Work on minimizing the effects and the risks of Covid-19 continued, with health and safety as our top priority. SSAB’s operations ran as planned during the second quarter. We responded quickly to adjust the organization to lower demand and our actions reduced the fixed costs by SEK 800 million, compared to the second quarter of 2019. Cost savings, which include short-time working allowances and temporary layoffs, are continuing during the third quarter.
Lower production levels continue and the blast furnace idled in Raahe in mid-April is planned to remain idled during the most of the third quarter. Due to the uncertain market conditions, our planned maintenance outages were brought forward to July and August from the fourth quarter. The outlook is uncertain but there are some signals in several of our customer segments indicating that demand could start to improve towards the end of third quarter.
SSAB continues to focus on developing the special steels business, as well as being the first to market with fossil-free steel in 2026. Already during the third quarter 2020, HYBRIT’s world unique pilot plant for fossil free steel will start operating in Luleå, Sweden.
Invitation to SSAB’s second quarter 2020 results briefing
SSAB invites you to a presentation of the quarterly report today at 9.30am CEST. The briefing will take place by conference call that will also be webcast on SSAB’s website. The interim report for the second quarter of 2020 will be presented by SSAB’s President and CEO Martin Lindqvist, and CFO Håkan Folin. The briefing will be held in English.
Time of briefing: Tuesday, July 21, 2020 at 9.30am CEST.
Sweden: +46 856 6426 51
United Kingdom: +44 3333 0008 04
United States: +1 6319 1314 22
Conference ID: 17664251#
Link to webcast: Go to webcast
For further information, please contact:
Investor Relations: Per Hillström, Head of IR,
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Media: Viktoria Karsberg, Head of Corporate Identity and Communications,
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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, 2020.