Comments by the CEO
SSAB’s operating profit for the first quarter of 2020 was SEK 343 million, down SEK 1,331 million compared with the first quarter of 2019. The first quarter of last year was characterized by more favorable market conditions, especially for SSAB Americas. Compared with the fourth quarter of 2019, which was characterized by destocking, weak margins, as well as our yearly planned maintenance, earnings improved by SEK 1,474 million.
SSAB Special Steels’ shipments were 305 (338) thousand tonnes. Operating profit was SEK 458 (678) million, lower volumes compared with the first quarter of 2019 had a negative impact. Compared with the previous quarter, demand recovered and earnings were up SEK 584 million.
For SSAB Europe, shipments were 955 (907) thousand tonnes and operating profit decreased to SEK 0 (347) million. Compared with the fourth quarter of 2019, shipments and earnings recovered.
SSAB Americas’ operating profit for the first quarter decreased to SEK 106 (956) million. The first quarter a year earlier was characterized by favorable market conditions with high heavy plate prices.
Currently, our top priority is to minimize the effects and the risks of Covid-19. Several measures have been taken to safeguard the health and safety of our personnel while maintaining SSAB’s operations. Furthermore, measures have been put in place to decrease the negative effects of lower shipments and higher underabsorption because of lower industrial activity among our customers.
We are adjusting production and costs to demand, rolling mill production in SSAB Europe is reduced by at least 25%, and one of the blast furnaces in Raahe was idled in mid-April. All three steel divisions have brought forward annual planned maintenance outages to the summer. Short-time work allowances and layoffs have been introduced, external services have been sharply reduced, projects have been pushed back and all other costs are being reviewed. These measures will deliver annualized savings totaling more than SEK 1 billion. We are postponing strategic investments of at least SEK 500 million that had been planned for 2020, but maintenance investments will be performed as planned.
SSAB has a strong balance sheet, as well as liquid assets and committed credit lines of approximately SEK 22 billion. Despite great uncertainty, SSAB continues to focus on developing the special steels business and the transition to fossil-free steel, both of which are deemed important to strengthen our long-term competitiveness.
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SOURCE: SSAB
