Report for the third quarter 2020: Lower demand and planned maintenance weighed on earnings
The third quarter · Revenue was SEK 14,481 (18,840) million · EBITDA was SEK -66 (1,327) million · Operating profit/loss was SEK -973 (300) million · Earnings per share were SEK -0.72 (0.03)
Comments by the CEO
SSAB’s operating result for the third quarter of 2020 was SEK -973 (300) million, down SEK 1,273 million compared with the third quarter of 2019. The steel markets continued to be negatively affected by lower economic activity following the outbreak of Covid-19. Compared with the second quarter of 2020, earnings contracted by SEK 722 million, which was mainly due to the costs of planned maintenance of SEK 670 million. Cash flow was positive, which consolidates our strong financial position.
SSAB Special Steels’ operating profit contracted to SEK 73 (358) million. The result was also lower than for the prior quarter, attributable to the planned maintenance outage and the adjustment of production volumes to lower demand.
SSAB Europe’s shipments decreased to 751 (794) thousand tonnes. The costs of planned maintenance outages, lower capacity utilization and lower prices pulled the operating result down to SEK -631 (-480) million.
SSAB Americas’ operating result for the third quarter decreased to SEK -435 (522) million. Weak demand, low margins and the costs of planned maintenance impacted the result.
Work on minimizing the effects and the risks of Covid-19 has continued. Through preventive measures with our suppliers, we avoided the spread of infection in conjunction with maintenance outages. The year’s planned maintenance work has now been completed and we can quickly ramp up production when the market allows. Our cost savings continued to have a good effect during the third quarter and we reduced fixed costs by over SEK 600 million, compared with the corresponding period last year. Compared to the first nine months 2019, the fixed costs were SEK 1.5 billion lower. Some of the measures are continuing during the fourth quarter. Some of the measures are continuing during the fourth quarter. Demand picked up towards the end of the period, especially in Europe and the activity level is expected to be somewhat higher in the fourth quarter.
SSAB continues to focus on developing the special steels business, as well as being the first with fossil-free steel. The target is to start shipments during 2026. During the third quarter of 2020, HYBRIT’s world unique pilot plant started operating in Luleå, Sweden and SSAB’s long-term targets for carbon dioxide emissions have been approved by the Science Based Targets initiative. The approval means that the objective is scientifically based and in line with the Paris Agreement.
Invitation to SSAB’s third 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 third 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: Thursday, October 22, 2020 at 9.30am CEST.
Sweden: +46 856 6426 51
United Kingdom: +44 3333 0008 04
United States: +1 6319 1314 22
Conference ID: 29874322#
Link to webcast: Go to webcast
For further information, please contact:
Investor Relations: Per Hillström, Head of IR, firstname.lastname@example.org, +46 70 2952 912
Media: Viktoria Karsberg, Head of Corporate Identity and Communications, email@example.com, +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 CEST on October 22, 2020.