Swedish steelmaker SSAB reported a second-quarter net profit that fell below expectations, largely due to a weakened demand in Europe and declining steel prices. In response to this, SSAB has taken necessary steps to adjust production, costs, and staffing, aiming to achieve cost reductions of over 500 million Swedish kronor ($48.3 million) annually.
Compared to the previous year, the company’s net profit declined from SEK8.02 billion to SEK3.92 billion, while revenue dropped by 11% to SEK31.78 billion. Analysts polled by FactSet had anticipated a net profit of SEK4.47 billion on sales of SEK33.06 billion.
SSAB expressed concerns about the continued weak demand in Europe throughout the second quarter and warned of the potential for a more significant downturn in the third quarter. However, the heavy plate market in North America is expected to maintain a good level of demand, and the demand for high-strength steel has been favorable, although customers are displaying a more cautious sentiment.
Shipments in special steels and SSAB Europe are forecasted to be somewhat lower in the third quarter compared to the second quarter, with prices also expected to decrease. On the other hand, SSAB Americas shipments are projected to increase slightly, while prices remain stable.
