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Rautaruukki Revises 2011 Earnings Guidance
10/10/2011 - Declining mill deliveries in the steel business and a reduced capacity utilization rate for the rest of the year have prompted Ruukki to lower its estimate for year-on-year sales growth to 15-20% from the previous estimate of 25%.
Declining mill deliveries in the steel business and a reduced capacity utilization rate for the rest of the year have prompted Rautaruukki to revise its 2011 earnings guidance.
The company now estimates that consolidated net sales will grow by approximately 15 to 20% instead of the earlier estimate of approximately 25%. The company also is estimating that profitability will improve compared to 2010, as compared to the earlier estimate that said profitability was expected to clearly improve compared to 2010.
Rautaruukki's lower expectation for consolidated net sales is based on the company’s change in outlook in the steel business for 2011. While the outlook for engineering and construction remains unchanged, estimates for economic activity for the rest of the year have weakened as a result of general uncertainty caused by the European debt crisis. In addition, mill deliveries, which account for more than half of total steel business deliveries, have been weaker than expected.
The company said that part of the reason profitability for its steel business would miss the earlier estimate for the second half was because of lowered capacity utilization. The company’s capacity utilization rate declined during the third quarter due to modernization of Blast Furnace 2 and normal seasonality, as well as to a decrease in order intake in mill deliveries. For the fourth quarter, the capacity utilization rate for the steel business is estimated to be around 80%.
Rautaruukki will publish its interim report for January-September 2011 on Wednesday, October 19, 2011.
Rautaruukki supplies metal-based components, systems and integrated systems to the construction and engineering industries, offering a wide selection of metal products and services. Rautaruukki has operations in 27 countries and employs around 11,700 people. Net sales in 2010 totaled around EUR 2.4 billion. The Corporation uses the marketing name Ruukki.
