PRESS RELEASE
20 April 2011 at 9.10 am EET

 

Highlights

 

- Operating profit EUR 33 million, underlying operational result EUR -12 million
- Improving end-user demand and restocking by distributors - deliveries up 14%
- Second quarter operating profit expected to be slightly positive or around break-even
- Mika Seitovirta appointed Outokumpu's CEO from 1 April 2011

               
Group key figures, EUR million            
    I/11 IV/10 I/10 2010  
Sales   1 371 1 162 929 4 229  
Operating profit   33 -85 -21 -83  
Profit before taxes   17 -86 -32 -143  
Net profit for the period   16 -91 -21 -124  
Earnings per share, EUR   0.09 -0.50 -0.11 -0.68  
Net cash generated from operating activities   -10 18 -87 -497  
             
Stainless steel deliveries, 1 000 tonnes   380 336 333 1 315  
Stainless steel base price, EUR/t 1)   1 215 1 213 1 235 1 252  
Stainless steel transaction price, EUR/t 2)   3 115 2 909 2 329 2 780  
             
1) CRU - German base price (2 mm cold rolled 304 sheet)            
2) CRU - German transaction price (2 mm cold rolled 304 sheet)        
             

Demand for stainless steel began to improve in early 2011. Growth in the first quarter was supported by restocking among distributors. In March the nickel price declined and this resulted in some destocking towards the end of the quarter. The coming summer period may create some softness in demand from distributors in the second quarter. Underlying demand has continued to improve and is expected to remain stable in the second quarter. While the order intake from investment-driven end-use segments has been improving, no major projects utilising special grades have materialised.

 

Outokumpu's deliveries of stainless steel increased by 14% to 380 000 tonnes in the first quarter compared to the first quarter of 2010. Base prices were unchanged but transaction prices, which also include raw-material costs, increased by 34%. The prices of the key raw-materials, nickel and ferrochrome, gained strongly from their year-ago levels: nickel price increased by 35% and ferrochrome price by 24%. Clearly higher delivery volumes and transaction prices resulted in a strong 48% increase in sales, which amounted to EUR 1.4 billion in the first quarter.

 

Outokumpu's operating profit in the first quarter was positive at EUR 33 million whereas in the first quarter of 2010 the Group reported EUR 21 million operating loss. The operating profit benefits from EUR 45 million of raw-material related inventory gains (EUR 10 million gains in 2010). Thus, the underlying operational result was at loss by EUR 12 million compared to EUR 32 million loss in the first quarter of 2010. The main reason for the profitability improvement is increase in delivery volumes.

 

Net cash from operating activities was slightly negative at EUR -10 million as EUR 93 million of cash was tied up in the working capital during the quarter. Outokumpu's gearing increased to 80.4%, above the Group's target maximum of 75%.

 

In February, Outokumpu's Board of Directors appointed Mr Mika Seitovirta as the new Chief Executive Officer from 1 April 2011. The earlier CEO Mr Juha Rantanen will support the new CEO in his taking on the new duties until August 2011.

 

Outokumpu estimates that the Group's delivery volumes in the second quarter will be at a similar level as the volumes in the first quarter. Average base prices are expected to be somewhat higher compared to the average prices in the first quarter. Outokumpu's operating profit in the second quarter is expected to be slightly positive or around break-even with no material impact from raw-material related inventory gains or losses (at current metal prices).

 

CEO Mika Seitovirta:

 

"The first weeks at Outokumpu have proven to be a great learning experience. I am energised and encouraged while going forward and gaining further knowledge of this great company and fascinating industry. Our immediate actions will be focused on profitability, cash flow and improving the balance sheet. Most of the management attention this year will be spent on the implementation of the short-term agenda, which is currently being prepared."

 

This press release presents the highlights of Outokumpu's official interim report, which has been distributed as a separate stock exchange release and is available at www.outokumpu.com/investors.

 

For further information, please contact:

 

Päivi Lindqvist, SVP - Communications and IR
tel. +358 9 421 2432, mobile +358 40 708 5351
paivi.lindqvist@outokumpu.com

 

Ingela Ulfves, VP - Investor Relations and Financial Communications
tel. +358 9 421 2438, mobile +358 40 515 1531
ingela.ulfves@outokumpu.com

 

Esa Lager, CFO
tel. +358 9 421 2516
esa.lager@outokumpu.com

 

OUTOKUMPU OYJ

 

 

 

Outokumpu is a global leader in stainless steel with the vision to be the undisputed number one. Customers in a wide range of industries use our stainless steel and services worldwide. Being fully recyclable, maintenance-free, as well as very strong and durable material, stainless steel is one of the key building blocks for sustainable future. Outokumpu employs some 8 000 people in more than 30 countries. The Group's head office is located in Espoo, Finland. Outokumpu is listed on the NASDAQ OMX Helsinki.
www.outokumpu.com:
http://www.outokumpu.com

 

ENG Q1 2011 Media release:
http://hugin.info/3010/R/1507890/442788.pdf



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Source: Outokumpu Oyj via Thomson Reuters ONE

HUG#1507890