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Sweden's SSAB posts larger-than-expected profit as steel prices soar

By Reuters

STOCKHOLM – Swedish steelmaker SSAB reported on Tuesday a bigger-than-expected jump in first-quarter earnings on the back of strong steel prices, but said the outlook for demand and shipments was beset by some uncertainty.

The specialized high-strength steels producer rode to a record profit last year on the back of soaring steel prices and strong output at its production plants in Sweden, Finland and the United States, a development that carried into 2022.

The niche steelmaker said operating profit, excluding extraordinary items, rose to 8.38 billion Swedish crowns ($864 million) from a year-ago 1.99 billion to surpass an analysts’ estimate of 6.66 billion from Refinitiv.

The company said in a statement that the first quarter had seen an “exceptional” rise in demand due to constraints on steel supply following Russia’s invasion of Ukraine, which Moscow calls a “special military operation”.

“Demand for steel during the second quarter of 2022 is expected to normalize and, hence, be on a somewhat lower level than in the first quarter,” the company said.

“There remain uncertainties with a shortage of components as well as bottlenecks in logistics chains.”

The Swedish steelmaker had warned in early February that repair work after an unplanned outage at one of its blast furnaces in Raahe, Finland, would dent first-quarter earnings by about 600 million crowns.

($1=9.6965 Swedish crowns)