SSAB profits disappoint analysts

Swedish steel producer SSAB Svenskt Stal AB said its second-quarter profit after financials amounted to 1.776 billion kronor, up just 1.6 percent from a year earlier and below average market expectations of 1.827 billion, as weaker gross margins took the shine off higher sales.

The result included a positive adjustment of 150 million kronor from an excessively high provisional estimation of iron ore costs during the first quarter. Positive currency effects added a further 200 million kronor.

However, the figures were hit by weaker gross margins at the company’s steel operations and at its trading and processing operations.

Sales increased 8.7 percent to a better than expected 8.096 billion kronor, with higher prices and an improved product mix adding 4 percentage points and increased volumes another 4 percentage points.

The company said demand for its core niche products, quenched steels and extra and ultra high strength sheet has remained strong, and it managed to increased sheet prices in local currencies by about 3 percent.