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Outokumpu Reports EUR -25 Million Underlying EBIT for Q2 2015: Improvement in Coil EMEA Not Enough to Cover Losses in Coil Americas
07/24/2015 - Outokumpu released its interim report for the second quarter of 2015 on 23 July.
Highlights in the second quarter 2015
Outokumpu’s underlying EBIT was EUR -25 million compared to EUR 2 million in the first quarter of 2015. While European restructuring progressed and performance in Coil EMEA improved, a decline in financial performance was driven by low delivery volumes and weak performance in Coil Americas. Coil Americas’ underlying EBIT loss increased to EUR 50 million. Operating cash flow was EUR -41 million.
Outokumpu estimates stainless steel end-user demand to remain relatively healthy in the third quarter. However, the European markets will be seasonally slow during the summer months, and in Americas, the pressure from Asian imports continues and low nickel price puts constraints on distributor sector buying, pricing and rebound of the market. In APAC region stainless steel market remains difficult.
Outokumpu estimates somewhat lower delivery volumes quarter-on-quarter with seasonal decline in Europe and gradual increase in Americas. The Group’s underlying EBIT for the third quarter is estimated to improve from the second quarter, but to remain negative mostly due to seasonal impacts. In addition to the ongoing savings programs, special measures are taken to improve profitability in Coil Americas. With current prices, the net impact of raw material-related inventory and metal derivative gains/losses on profitability is expected to be EUR 10-15 million negative.
Outokumpu’s operating result may be impacted by non-recurring items associated with the ongoing restructuring programs. This outlook reflects the current scope of operations.
For a more detailed breakdown of Outokumpu’s performance in Q2 2015, visit www.outokumpu.com.
Outokumpu is a global leader in stainless steel. We create advanced materials that are efficient, long lasting and recyclable – thus building a world that lasts forever. Stainless steel, invented a century ago, is an ideal material to create lasting solutions in demanding applications from cutlery to bridges, energy and medical equipment: it is 100% recyclable, corrosion-resistant, maintenance-free, durable and hygienic. Outokumpu employs more than 12 000 professionals in more than 30 countries, with headquarters in Espoo, Finland and shares listed on the Nasdaq Helsinki. www.outokumpu.com
Outokumpu’s underlying EBIT was EUR -25 million compared to EUR 2 million in the first quarter of 2015. While European restructuring progressed and performance in Coil EMEA improved, a decline in financial performance was driven by low delivery volumes and weak performance in Coil Americas. Coil Americas’ underlying EBIT loss increased to EUR 50 million. Operating cash flow was EUR -41 million.
- Stainless steel deliveries were 616,000 tonnes1 (I 2015: 620,000 tonnes).
- Underlying EBITDA2 was EUR 57 million (I 2015: EUR 77 million) and underlying EBIT2 was EUR -25 million (I 2015: EUR 2 million). The decline was driven by weak performance in Coil Americas.
- EBIT was EUR -26 million (I 2015: EUR -10 million). The net effect of raw material-related inventory and metal derivative gains/losses was EUR -1 million (I 2015: EUR 7 million). There were no non-recurring items in the second quarter (I 2015 EUR -19 million).
- Operating cash flow was EUR -41 million (I 2015: EUR -62 million).
- Net debt increased to EUR 2,116 million (March 31, 2015: EUR 2,034 million) and gearing was 96.4% (March 31, 2015: 91.5%).
Outokumpu estimates stainless steel end-user demand to remain relatively healthy in the third quarter. However, the European markets will be seasonally slow during the summer months, and in Americas, the pressure from Asian imports continues and low nickel price puts constraints on distributor sector buying, pricing and rebound of the market. In APAC region stainless steel market remains difficult.
Outokumpu estimates somewhat lower delivery volumes quarter-on-quarter with seasonal decline in Europe and gradual increase in Americas. The Group’s underlying EBIT for the third quarter is estimated to improve from the second quarter, but to remain negative mostly due to seasonal impacts. In addition to the ongoing savings programs, special measures are taken to improve profitability in Coil Americas. With current prices, the net impact of raw material-related inventory and metal derivative gains/losses on profitability is expected to be EUR 10-15 million negative.
Outokumpu’s operating result may be impacted by non-recurring items associated with the ongoing restructuring programs. This outlook reflects the current scope of operations.
For a more detailed breakdown of Outokumpu’s performance in Q2 2015, visit www.outokumpu.com.
Outokumpu is a global leader in stainless steel. We create advanced materials that are efficient, long lasting and recyclable – thus building a world that lasts forever. Stainless steel, invented a century ago, is an ideal material to create lasting solutions in demanding applications from cutlery to bridges, energy and medical equipment: it is 100% recyclable, corrosion-resistant, maintenance-free, durable and hygienic. Outokumpu employs more than 12 000 professionals in more than 30 countries, with headquarters in Espoo, Finland and shares listed on the Nasdaq Helsinki. www.outokumpu.com
