The quarter
- Sales of SEK 8,894 (10,816) million
- Operating profit/loss of SEK -115 (755) million
- Profit/loss after financial items of SEK -273 (609) million
- Earnings per share of SEK -0.44 (1.48)
- Operating cash flow of SEK 796 (948) million and cash flow from current operations of SEK 624 (495) million
Comments by the CEO
As anticipated, the second quarter was characterized by a continued weak European market. In addition, the improved economic climate in the US has had no appreciable effect on demand for steel. The slow-down of the growth in China and weak development in the Australian mining industry had a clear impact on demand for steel. The stronger Swedish krona has weakened our competitiveness. The negative effect on the result compared to the first half of 2012 was approximately SEK 500 million.
Restocking by customers, which began during the first quarter, came to an end at the beginning of the second quarter and inventory levels at customers and distributors are now considered to be in balance, although at relatively low levels.
The efficiency program within SSAB EMEA has been implemented and has had a positive impact on earnings for the quarter. The full effect on an annual basis will be achieved as from 2014. In SSAB Americas, a scheduled maintenance outage resulted in lower earnings than in the preceding quarter. Thanks to continued focus on efficiency we have reduced our costs according to plan.
It appears that the weak trend in southern Europe will continue during the third quarter, while demand in northern and eastern Europe appears to be more stable. During the latter part of the second half of the year, the improved economic climate in the US is expected to impact on demand for steel, and it appears that demand in Latin America will remain stable. In Asia, demand in China is expected to stabilize during the second half of the year, while growth in the mining industry, particularly in Australia, is expected to be weak during the remainder of the year.
Customary maintenance outages will be carried out in the Swedish operations during the third quarter. Due to the anticipated market trend, the maintenance outage in Mobile (originally scheduled for the fourth quarter) will partly be brought forward to the third quarter, and this is expected to negatively impact on SSAB Americas’ third quarter earnings in the amount of SEK 50 million. Even if there is still a great deal of uncertainty regarding trends on the steel market, most signs indicate stabilization in demand during the second half of 2013.
SSAB is a global leader in value added, high strength steel. SSAB offers products developed in close cooperation with its customers to create a stronger, lighter and more sustainable world. SSAB has employees in over 45 countries and operates production facilities in Sweden and the US. SSAB is listed on the NASDAQ OMX Nordic Exchange, Stockholm. www.ssab.com.