.gif?width=220&height=220&mediaprotectionhash=27a2c7b682a980edd98804d5ef3ab0afa2e746bbcbde7192e62ce4a3fe797500&ext=.gif)
SSAB Expects to Report First Half Loss in Face of Continued Market Weakness
06/18/2009 - Citing continued weakness in the steel market through the second quarter, SSAB said that it now expects to post an operating loss of more than SEK 1 billion for the first six months of 2009.
Citing continued weakness in the steel market through the second quarter, SSAB, Sweden, said this week that it now expects to post an operating loss of more than SEK 1 billion for the first six months of 2009.
With the two blast furnaces at its Oxelösund mill already idled, the company said it continues to cut back production to match ongoing low deliveries, and will now also idle its Luleå blast furnace beginning next week. The cuts will further reduce the company’s capacity utilization rates, which are already well below the 50% level. The low capacity utilizations are exacerbated by ongoing downward pressure on prices.
Despite the weakness in results, SSAB said that it does expect to report a positive operating cash flow for the first six months, thanks to the cost savings program the company initiated in December as well as ongoing measures by the company to release working capital.
SSAB said that it has negotiated agreements with its suppliers regarding coal prices for 2009, which are valid from April 1 and will be (in USD) 47% below last year’s prices. The company also said that it has not yet finalized negotiations for iron ore pellet prices, but expects its prices to settle in line with prices reached in recent agreements among leading global companies, which are some 48% below the USD price levels for last year.
SSAB is a global leader in value-added, high strength steel, offering a range of products developed in close cooperation with its customers. SSAB employs 9200 people in over 45 countries around the world and operates production facilities in Sweden and the U.S.
