Interim reports The rise in energy prices hit Outokumpu – despite the improvement in earnings, the share price will fall

Economic|Interim reports

Steel company Outokumpu’s share price will fall sharply on the stock exchange after the company’s earnings announcement. At noon, the stock was down more than 5 percent.

This was despite the fact that the company increased its sales and significantly improved its profitability from the previous year. Full-year net sales increased by 37 percent to EUR 7.7 billion. Adjusted operating profit for the full year was EUR 758 million, compared to a profit of EUR 4 million in the previous year.

Managing director Heikki Malinen describes last year as a success for the company.

“In an exceptionally strong market situation, we achieved the best annual result in our recent history,” says Malinen in the earnings release.

“During the year, our factories have been operating at full capacity, with full-year deliveries up 13 percent from the previous year. All business areas performed well in 2021, and the development of realized stainless steel prices has been favorable. ”

The company’s Board of Directors proposes that a dividend of EUR 0.15 per share be distributed to the owners.

Result however, fell short of expectations. The analysts’ consensus forecast was that adjusted operating profit for the full year would have been approximately EUR 30 million higher, EUR 784 million.

According to the company, profitability suffered from a significant rise in energy and input prices towards the end of the year, at the same time as fixed costs also rose. According to Malinen, there were also problems in logistics, which the company has tried to solve.

However, according to the company, the increase in production costs has been passed on to prices. According to the earnings release, the increase in stainless steel prices is reflected in orders already received and exceeds the increase in the price of energy and production materials. The company estimates that it will supply more stainless steel at the beginning of the year than at the end of the year.