SSAB tops profit forecast ahead of expected boost from EU steel safeguards
SSAB Reports Strong First-Quarter Results and Anticipates Positive Impact from EU Regulations
April 28 (Reuters) - Swedish steelmaker SSAB reported a bigger than expected rise in its first-quarter operating profit on Tuesday, aided by higher results in its Europe and Americas units and a good level of shipments for its advanced steels.
Financial Performance Overview
Operating earnings rose 63% to 2.20 billion Swedish crowns ($237.9 million) in the quarter. Analysts were expecting 2.05 billion crowns on average, a poll provided by SSAB showed.
Market Conditions in Europe
Europe's steel sector, long squeezed by high energy costs and cheaper imports from Asia, stands to gain from tighter EU trade measures and the bloc's carbon border levy on high-emission imports, which should help shield domestic producers.
CEO Statement on EU Steel Safeguards
"SSAB expects this to improve the supply-demand balance in the European market," CEO Johnny Sjostrom said in a statement, referring to the European Union's new steel safeguard regulation.
The safeguard will come into effect from July 1, reducing the bloc's overall steel import quotas by about 47% to 18.3 metric tons per year and increasing the out-of-quota duty to 50%.
Impact of Geopolitical Events
SSAB has seen limited direct impact from the war in the Middle East, with customers across several markets growing more cautious, Sjostrom said. This raises the risk that a prolonged conflict could weigh on economic activity, he added.
Outlook for Upcoming Quarters
The company said it expected second-quarter shipments at its Special Steels, Europe and Americas divisions to be stable compared to the previous three months.
Realised steel prices are seen somewhat higher for all three units, while raw material costs are set to be somewhat higher for Special Steels and Europe and fairly stable for the Americas.
($1 = 9.2487 Swedish crowns)
(Reporting by Marta Frąckowiak in Gdańsk; Editing by Milla Nissi-Prussak)
