April 27, 2020 / 5:41 AM / in a month

BRIEF-SSAB Q1 Operating Profit Falls To SEK 343 Million

April 27 (Reuters) - SSAB AB:

* REPORT FOR THE FIRST QUARTER 2020: RECOVERY, BUT OUTLOOK UNCERTAIN

* Q1 REVENUE WAS SEK 18,772 (20,017) MILLION

* SSAB AMERICAS’ OPERATING PROFIT FOR Q1 DECREASED TO SEK 106 (956) MILLION

* Q1 OPERATING PROFIT WAS SEK 343 (1,674) MILLION

* Q1 OF LAST YEAR WAS CHARACTERIZED BY MORE FAVORABLE MARKET CONDITIONS, ESPECIALLY FOR SSAB AMERICAS

* INDUSTRIAL DECELERATION FOLLOWING THE BREAKOUT OF COVID-19 AFFECTS STEEL DEMAND NEGATIVELY

* SAYS DESPITE GREAT UNCERTAINTY, SSAB CONTINUES TO FOCUS ON DEVELOPING SPECIAL STEELS BUSINESS AND TRANSITION TO FOSSIL-FREE STEEL, BOTH OF WHICH ARE DEEMED IMPORTANT TO STRENGTHEN OUR LONG-TERM COMPETITIVENESS

* Q1 A YEAR EARLIER WAS CHARACTERIZED BY FAVORABLE MARKET CONDITIONS WITH HIGH HEAVY PLATE PRICES.

* CURRENTLY, OUR TOP PRIORITY IS TO MINIMIZE EFFECTS AND RISKS OF COVID-19.

* SEVERAL MEASURES HAVE BEEN TAKEN TO SAFEGUARD HEALTH AND SAFETY OF OUR PERSONNEL WHILE MAINTAINING SSAB’S OPERATIONS

* IT IS ESTIMATED THAT DEMAND FOR HIGH-STRENGTH STEEL WILL INITIALLY DECREASE SOMEWHAT LESS THAN DEMAND FOR STANDARD STEEL.

* FURTHERMORE, MEASURES HAVE BEEN PUT IN PLACE TO DECREASE 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 BLAST FURNACES IN RAAHE WAS IDLED IN MID-APRIL

* ALL THREE STEEL DIVISIONS HAVE BROUGHT FORWARD ANNUAL PLANNED MAINTENANCE OUTAGES TO SUMMER

* DEMAND FOR HIGH-STRENGTH STEEL IS EXPECTED TO ALSO GAIN SOME SUPPORT BY OUR GLOBAL PRESENCE FROM, AMONG OTHERS, ASIAN MARKETS,

* 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.

* PRICES REALIZED BY SSAB AMERICAS DURING THE SECOND QUARTER OF 2020 ARE EXPECTED TO BE LOWER THAN IN THE FIRST QUARTER OF 2020

* SSAB HAS A STRONG BALANCE SHEET, AS WELL AS LIQUID ASSETS AND COMMITTED CREDIT LINES OF APPROXIMATELY SEK 22 BILLION.

* FOR SSAB SPECIAL STEELS, PRICES ARE EXPECTED TO BE SOMEWHAT LOWER AND FOR SSAB EUROPE, PRICES ARE EXPECTED TO BE MORE OR LESS FLAT, VERSUS Q1

* IT IS ESTIMATED THAT SHIPMENTS FOR SSAB AMERICAS AND SSAB EUROPE WILL CONTRACT SHARPLY DURING THE SECOND QUARTER COMPARED WITH Q1 Source text for Eikon: Further company coverage: (Gdansk Newsroom)

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