Outokumpu’s 3Q Results Mixed, Europe Weighs on Outlook

Outokumpu

Finnish stainless steel producer Outokumpu reported mixed results for the third quarter of 2023. While its Americas business unit performed strongly, the European market downturn weighed on overall performance.

Q3 Performance

• Shipments: Total stainless steel shipments declined by 2.23% year-over-year to 459,000 tonnes. European deliveries were particularly weak, falling 2% sequentially.
• Realised Prices: The company achieved higher realised prices in Europe but lower prices in the Americas. However, higher scrap prices offset the positive impact of realised prices.
• Costs: Costs increased due to salary inflation and maintenance work, partially offset by lower electricity and consumable prices.
• Adjusted EBITDA: Despite the challenges, adjusted EBITDA surged nearly 70% year-over-year to €86 million.

Year-to-Date Performance

• Shipments: Year-to-date stainless steel shipments decreased by 5.8% to 1.371 million tonnes, primarily driven by a weaker European market and a political strike in Finland.
• Regional Performance: European deliveries declined by 10% to 935,000 tonnes, while Americas deliveries increased by 8.77% to 459,000 tonnes.

Outlook

Outokumpu expects a challenging fourth quarter with a 0-10% decline in stainless steel deliveries compared to the third quarter. The European and American markets are expected to weaken further, and a planned maintenance break in Tornio will impact EBITDA. Additionally, rising energy costs in Europe will add further pressure.