Steelmaker Outokumpu reported its third quarter results.
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Outokumpu's sales in the third quarter of 2023 decreased to EUR 1,531 million (EUR 2,339 million).
Adjusted EBITDA amounted to EUR 51 million (EUR 304 million) and the decrease compared to the reference period was driven by a substantially weaker market environment, especially in Europe.
As a result of lower profitability, ROCE for the rolling 12 months was 5.3% (26.8%).
In the third quarter of 2023, total stainless steel deliveries were 9% lower compared to the reference period.
The significant decrease in profitability was mainly driven by substantially lower realized prices for stainless steel in Europe.
Realized prices for stainless steel decreased also in Americas and the ferrochrome sales price was lower.
Profitability was, however, supported by decreased variable costs, mainly due to lower electricity and ferrosilicon prices. Raw material-related inventory and metal derivative losses amounted to EUR 27 million (losses of EUR 107 million).
Other operations and intra group items' adjusted EBITDA totaled EUR 5 million (EUR 7 million). Both net result and earnings per share turned negative for the quarter and were driven by weak EBITDA development. Net result was EUR -55 million in the third quarter of 2023 (EUR 207 million).
Outokumpu aims to streamline its operations in Germany and plans restructuring measures to utilize its assets the most efficient way.
The planned restructuring measures are expected to impact close to 200 people in Germany. Outokumpu intends to commence negotiations with employee representatives in Germany in full respect of local legislation and practices.
The restructuring measures would entail yearly savings of approximately EUR 15 million.
Furthermore, the planned transfer of the precision strip production from Dahlerbrück would also involve small investments in the machinery in Dillenburg. In total, the transfer related investments and costs are expected to amount to approximately EUR 20 million. ■