GuruFocus -
- Revenue: SEK 24.4 billion in Q3, a 14% decrease from Q2 and a 17% decrease year-over-year.
- EBITA: SEK 2.3 billion in Q3, a reduction of SEK 1.7 billion from the previous quarter and SEK 3 billion year-over-year.
- Steel Shipments: 1,457 kilotonnes in Q3, 11% lower than Q2 and 3% lower year-over-year.
- Maintenance Costs: SEK 950 million in Q3, with significant maintenance in Montpelier and other locations.
- Net Position: SEK 13.3 billion at the end of Q3.
- Cash Flow: Positive before dividend, with a dividend payout of SEK 5 billion and share buyback impact of SEK 1.2 billion.
- CapEx Plan: SEK 6.3 billion for the year, with SEK 3.5 billion spent year-to-date.
- Raw Material Costs: Expected to be somewhat lower for special steels in Q4, stable for Europe, and somewhat higher for Americas.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- SSAB AB (SSAAF) is progressing well with its transformation plan, including the construction of new electric arc furnaces and the closure of older facilities, aiming for a more flexible and cost-effective production setup.
- The company is focusing on increasing its capacity for high-strength and premium steels, which have shown more stable prices and earnings compared to standardized steel products.
- SSAB AB (SSAAF) is committed to eliminating CO2 emissions from its operations, aligning with growing demand for environmentally friendly steel products.
- The company has maintained good pricing management in challenging market conditions, particularly in its special steels division, which has shown stable demand and profitability.
- SSAB AB (SSAAF) has received a grant of over EUR 100 million to support its decarbonization efforts, indicating strong external support for its sustainability initiatives.
- The European market remains weak, with a seasonal slowdown and lower apparent demand impacting SSAB AB (SSAAF)'s performance.
- The company faced significant maintenance costs in Q3, totaling SEK 950 million, which affected its financial results.
- SSAB AB (SSAAF) anticipates somewhat lower shipments in Europe and special steels in Q4, with lower prices expected in Europe and the Americas.
- The construction market continues to be weak, affecting the Ruukki Construction division, despite efforts to focus on the renovation segment.
- The company's financial performance was impacted by lower volumes and prices compared to the previous year, with a 17% reduction in revenue year-on-year.
A: Martin Lindqvist, President and CEO, stated that over time, SSAB expects to continue structurally growing these volumes. While predicting specific quarterly outcomes is challenging, the company is confident in its long-term growth due to new platforms and continuous development of better grades.
Q: How do you view the typical restocking cycle going into 2025, considering the current weaker market?
A: Martin Lindqvist explained that restocking typically occurs in Q1, and this pattern is expected to continue, especially if prices show signs of increasing. Current low prices compared to marginal costs suggest potential restocking.
Q: What impact does LKAB's decision to pause their green sponge iron plant have on SSAB's transition plans?
A: Martin Lindqvist clarified that SSAB sources its volumes from LKAB's Southern system, not Kiruna, so there is no impact on SSAB's plans. The transformation continues as planned.
Q: How confident are you in receiving the environmental permit for Ruukki in Q4, and what happens if you don't get it?
A: Martin Lindqvist expressed confidence in receiving the permit within the quarter. However, without it, SSAB cannot start the project, as environmental permits are mandatory in Sweden before construction can begin.
Q: Can you provide insights into the expected CapEx peak in 2026 and 2027?
A: Leena Craelius, Acting CFO, mentioned that CapEx will increase next year, with more detailed guidance for 2025 to be provided in the next results release. The peak is anticipated in 2026 and 2027, but specific figures are not yet disclosed.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.