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SSAB swings to profit in Q1

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17:10 CEST+02:00
Steel producer SSAB reported a quarterly profit of 83 million kronor ($11.34 million) on Tuesday, beating analyst expectations and a 215 million kronor loss in the same period last year. The company expects that demand for steel will remain strong in the second quarter.

Sales amounted to 8.865 billion kronor compared with 8.035 billion kronor a year earlier. According to Reuters, analysts had on average expected a loss of 105 million kronor and turnover of 9.269 billion kronor.

After the announcement, SSAB shares rose sharply on the Stockholm Stock Exchange, getting an extra lift from forecasts for the company's near future.

"Steel demand is expected to remain favourable in the second quarter," said SSAB CEO Olof Faxander in the interim report.

In Latin America, Australia and Asia in particular, development is "very good," said Faxander. Demand is also increasing in Europe and North America, but at a slower pace, he added.

Orders from the mining sector showed growth. "There is also an increase in heavy transport, but at a low level," said Faxander.

SSAB has not yet signed a contract with its main supplier of iron ore, state-run Luossavaara-Kiirunavaara AB, better known as LKAB.

"Given the developments in the world market, however, we expect a significant price increase for iron ore starting in the second quarter," said Faxander.

SSAB has raised its own prices and these increases are estimated to offset the increased raw material costs in the second quarter. The company estimates that its prices may rise even further in the third quarter.

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