3 Min Read
* SSAB Q1 operating profit 702 mln SEK vs 237 mln forecast
* Europe main driver behind SSAB profit beat
* Rising industrial demand offers boost to steelmakers (Adds CEO comment, shares, background, details)
By Johannes Hellstrom
STOCKHOLM, April 21 (Reuters) - Swedish steelmaker SSAB posted a first-quarter operating profit on Friday that exceeded analyst forecasts fuelled by a rise in sales prices and deliveries in Europe, sending its shares as much as 10 percent higher.
Shares in the company, which also has operations in the United States, have climbed in the past 15 months, lifted by factors that include cost cuts, rising industrial demand and anti-dumping measures by the United States and European Union.
Other U.S. and European steel producers also saw shares gain during 2016, benefiting from lower Chinese exports and more demand from automotive, energy and construction companies.
SSAB reported operating profit in the first three months of 702 million Swedish crowns ($78 million), sharply up from a 193 million loss in the same quarter last year, and well above a Reuters poll forecast of 237 million crowns.
The bulk of the profit rise came from SSAB Europe, the company's largest division. SSAB cited high deliveries and production levels, as well as higher prices. Volumes sold to car makers rose 20 percent from a year ago.
"We saw strong a performance from SSAB Europe," SSAB chief executive Martin Lindqvist told a conference call.
The firm said it expected demand in Europe to remain good during the second quarter.
SSAB said it expected shipments for the whole group to rise in the second quarter. It forecast higher sales prices, but cautioned that the effect would be mitigated by increased costs for raw materials, such as coking coal and iron ore.
The firm also has operations in the United States, running two large steel mills in Mobile, Alabama and Montpelier, Iowa.
U.S. President Donald Trump launched a trade probe on Thursday against China and other exporters of cheap steel to the U.S. market, raising the possibility of new tariffs and boosting shares of U.S producers, like Nucor and U.S. Steel .
"We are the biggest plate producer in North America and one of the big steel companies in North America, so what is good for the U.S. steel industry is obviously good for SSAB as well," Lindqvist said, without directly commenting on Trump's move.
SSAB said it expected demand for heavy plate in North America to be good in the second quarter.
SSAB shares, which climbed as much as 10 percent during the session, were up 9.0 percent by 1102 GMT, taking its 2017 rise to 11.7 percent. SSAB shares more than doubled in 2016.
$1 = 8.9798 Swedish crowns Editing by Edmund Blair