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SSAB Announces Results of Challenging 2013
02/07/2014 - SSAB announced its fourth quarter and full year 2013 results, commenting on market conditions and providing an outlook for the North American and European markets in 2014.
The quarter — 2013 vs (2012)
President & CEO Martin Lindqvist’s comments:
“The operating loss for the fourth quarter of 2013 was SEK -282 million, an improvement of SEK 316 million compared with the third quarter of 2013 and SEK 383 million compared with the fourth quarter of 2012. The improvement compared with the same quarter of last year is primarily attributable to higher volumes, improved capacity utilization and lower variable costs. At the same time, the result was negatively affected by lower prices. The operating cash flow remained strong at SEK 575 million in the fourth quarter and SEK 1,956 million for the full year of 2013. During 2013, net debt was reduced by almost SEK 700 million.
“During 2014, we anticipate that the North American market will continue to improve and that SSAB will benefit from higher prices and stronger demand. In the U.S., during the fourth quarter and January we announced price increases for plate totaling US$ 130 per metric ton (more than 15%). The price increases will gradually have an impact during the first and second quarter 2014. However, during the fourth quarter market prices of scrap increased with approximately US$ 70 per metric ton. At the end of the first quarter and beginning of the second quarter, a maintenance outage will be carried out in Mobile which will affect shipments and earnings negatively. The European market was weak in 2013, but there are indications that the market has bottomed out. In Asia, especially in China, general demand for steel is expected to grow in 2014, but at a slower pace.
“2013 has been a very challenging year for SSAB and for the steel industry as a whole, characterized by weak demand and low prices. For SSAB specifically, the strong krona affected earnings negatively, with approximately SEK 500 million compared to 2012 Also, some of our most important segments, like Mining and Construction Machinery, had an even weaker development than the general market. One positive consequence of testing times is that it creates scope for new solutions. It is, therefore, pleasing that at the end of January 2014 we were able to announce our ambition to combine with Rautaruukki, with the aim of creating a more competitive steel company. Together, we will have a flexible and efficient production system in the Nordic region, while at the same time having even better possibilities to serve our customers. In addition, we obtain stronger opportunities continuing to develop our leading global positions within high strength steels.”
- Sales of SEK 8,920 (8,354) million
- Operating loss of SEK -282 (-665) million
- Loss after financial items of SEK -436 (-842) million
- Earnings per share of SEK -0.82 (-0.70)
- Operating cash flow of SEK 575 (1,251) million and cash flow from current operations of SEK 217 (1,049) million
- Sales of SEK 35,022 (38,923) million
- Operating loss of SEK -1,131 (-96) million
- Loss after financial items of SEK -1,728 (-693) million
- Earnings per share of SEK -3.29 (0.05)
- Operating cash flow of SEK 1,956 (4,929) million and cash flow from current operations of SEK 1,103 (3,925) million
- Net debt decreased to SEK 14,833 (15,498) million and net debt/equity ratio amounted to 55 (54) %
- A dividend is proposed of SEK 0.00 (1.00) per share, equal to SEK 0 (324) million
President & CEO Martin Lindqvist’s comments:
“The operating loss for the fourth quarter of 2013 was SEK -282 million, an improvement of SEK 316 million compared with the third quarter of 2013 and SEK 383 million compared with the fourth quarter of 2012. The improvement compared with the same quarter of last year is primarily attributable to higher volumes, improved capacity utilization and lower variable costs. At the same time, the result was negatively affected by lower prices. The operating cash flow remained strong at SEK 575 million in the fourth quarter and SEK 1,956 million for the full year of 2013. During 2013, net debt was reduced by almost SEK 700 million.
“During 2014, we anticipate that the North American market will continue to improve and that SSAB will benefit from higher prices and stronger demand. In the U.S., during the fourth quarter and January we announced price increases for plate totaling US$ 130 per metric ton (more than 15%). The price increases will gradually have an impact during the first and second quarter 2014. However, during the fourth quarter market prices of scrap increased with approximately US$ 70 per metric ton. At the end of the first quarter and beginning of the second quarter, a maintenance outage will be carried out in Mobile which will affect shipments and earnings negatively. The European market was weak in 2013, but there are indications that the market has bottomed out. In Asia, especially in China, general demand for steel is expected to grow in 2014, but at a slower pace.
“2013 has been a very challenging year for SSAB and for the steel industry as a whole, characterized by weak demand and low prices. For SSAB specifically, the strong krona affected earnings negatively, with approximately SEK 500 million compared to 2012 Also, some of our most important segments, like Mining and Construction Machinery, had an even weaker development than the general market. One positive consequence of testing times is that it creates scope for new solutions. It is, therefore, pleasing that at the end of January 2014 we were able to announce our ambition to combine with Rautaruukki, with the aim of creating a more competitive steel company. Together, we will have a flexible and efficient production system in the Nordic region, while at the same time having even better possibilities to serve our customers. In addition, we obtain stronger opportunities continuing to develop our leading global positions within high strength steels.”
