Sweden’s SSAB issues profits warning

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.

“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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