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Steel giant bid to break even despite losses
Stainless steel giant Outokumpu is continuing to aim to break even by the end of the year, despite pre-tax losses of €81 million (£73 million) for the third quarter of the year.
The Finnish company, which has major operations in Sheffield, where stainless steel was invented 86 years ago, says uncertainty in markets has continued and there has been no major improvement in underlying demand.
Outokumpu has continued to cut back on production and was working at no more than 55 per cent capacity in the third quarter.
This year the company closed its thin strip business at Meadowhall, with the loss of 230 jobs, and then axed 150 jobs in its Shepcote Lane melting shop as part of a plan to cut costs by reducing annual production to 200,000 tonnes from a maximum capacity of 500,000 tonnes.
The company will not go ahead with plans to expand the melting capacity of its Avesta plant in Sweden in the foreseeable future as it sees no need for additional capacity in the medium term.
Decisions on other postponed investments will be made by the end of 2010.
Chief executive Juha Rantanen said: "Stainless steel markets have not seen any major improvement. Underlying demand continues to be weak and the purchasing behaviour of steel distributors is very much driven by short-term developments in nickel price.
"On a positive note, our financial performance is on an improving trend and both prices and volumes are expected to increase in the fourth quarter.
"Our priorities in the current market are to balance short-term cost and cash-flow management with longer-term strategy implementation.
"We have not given up our ambition of reaching break-even operating profit towards the end of the year."
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Thursday 24 May 2012
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