Outokumpu Corporation has released its half-year report for January to June 2024, revealing a notable improvement in profitability, particularly within its European business area. The company reported stainless steel deliveries of 912,000 metric tons for the first half of the year, a decrease from 1,007,000 metric tons in the same period last year. Despite this decline, Outokumpu has managed to navigate a tough market environment, with adjusted EBITDA reaching €94 million, down from €394 million in the previous year.
In the second quarter of 2024, Outokumpu's sales amounted to €1,540 million, a decrease from €1,911 million in the same quarter of 2023. The company’s adjusted EBITDA for this period was €56 million, significantly impacted by a political strike in Finland, which cost the company approximately €30 million in lost earnings. This strike led to operational disruptions not only in Finland but also affected internal material flows across Outokumpu’s operations in Europe and the Americas.
The political strike's repercussions were evident, with a reported net result of € -5 million for the second quarter, compared to €89 million in the same quarter the previous year. Earnings per share also reflected this downturn, landing at € -0.01, a stark contrast to €0.21 in Q2 2023. The company faced challenges in the scrap market, which remained tight despite low demand for end products, further complicating profitability.
Outokumpu’s business area Europe showed some resilience, achieving an adjusted EBITDA of €28 million in Q2 2024. The stainless steel deliveries in this region increased by 4% compared to the previous quarter. The company noted that the European market is gradually recovering from a low point experienced in late 2023, although several structural challenges persist, including the ongoing impacts of the war in Ukraine and the transition to greener practices.
In the Americas, the situation was mixed. The adjusted EBITDA reached €21 million, with a 7% increase in stainless steel deliveries. However, profitability was hindered by increased maintenance costs stemming from temporary operational issues. The market environment in this region softened, with rising imports into Mexico affecting the supply-demand balance. Despite these challenges, Outokumpu remains optimistic about long-term prospects in the U.S. market.
The Ferrochrome segment also contributed positively, with an adjusted EBITDA of €22 million, supported by improvements in the ferrochrome market. Outokumpu's ownership of the only chromium mine in the EU, which boasts the lowest carbon footprint globally, strengthens its competitive position in this sector.
Looking ahead, Outokumpu anticipates stable stainless steel deliveries in the third quarter of 2024, while the European market is expected to continue its slow recovery. The company plans to enhance its cost competitiveness, particularly in commodity stainless steel production, to navigate the challenging economic landscape.
