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Sweden’s SSAB issues profits warning

Swedish steelmaker issued a profits warning on Thursday, expecting weak demand and lower production to push operating profits to near zero.

Sweden's SSAB issues profits warning

“SSAB’s operating profit for the fourth quarter 2010 will be negatively

impacted by lower shipments and production, and is expected to be close to

zero,” the company said in a statement.

The announcement sent the company’s shares plunging 4.9 percent to 91.10 kronor ($13.20) shortly after the Stockholm Stock Exchange opened. The stock was down 3.70 percent to 106.70 kronor at 10am CET.

The steelmaker said demand in Europe had weakened at a faster rate than it expected and that production problems at one furnace also contributed to a decline in earnings.

It added that deliveries for the first quarter had however “improved significantly” compared to the current quarter.

“The order book for SSAB Americas is such that we anticipate full production during the first quarter of 2011, while the picture remains somewhat weaker in Europe,” the company said.

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REPORT

Swedish banking giants report mixed fortunes

Swedish bank Nordea on Thursday posted falling profits in the second quarter while competitor Handelsbanken announced growing figures for the same period.

Swedish banking giants report mixed fortunes
Handelsbanken CEO Pär Boman. File photo: TT

Nordea's net profit fell by 11 percent to €686 million ($928 million), compared to €771 million a year earlier.

"Interest rates continue to come down and the general level of economic activity as well as volatility is low," Nordea chief executive Christian Clausen said in a statement.

"We have seen continued strong activity in our savings area and in the corporate advisory business."

Revenue was almost stable at €1.368 billion, compared to €1.391 billion for the same period last year.

"Low loan growth and interest rates also put pressure on our net interest income," Clausen said.

The bank said that its cost-cutting plan was "progressing as planned" and that it expects to see the results by the end of 2014 and onwards.

Nordea said it has saved €300 million since the launch of the cost-reduction measures at the beginning 2013.

The second quarter looked better for Handelsbanken, which posted profits increasing by 9.0 percent compared to a year earlier to 4.034 billion kronor ($590 million).

Revenue reached 6.704 billion kronor, slightly above the 6.653 billion kronor the bank posted in the same period of 2013.

The loan loss ratio was 0.07 percent, the same as last year.

Handelsbanken is Sweden's largest bank in terms of deposits.

Between April and June, its liquidity reserves stayed above 800 billion kronor, as the bank continued its expansion in the British market.

"The bank has decided to establish a fifth regional bank in the UK, with its head office in Leeds," Handelsbanken said in a statement, adding that this would start in the first quarter of 2015.

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