SSAB is going to strengthen its position in 2016

The Swedish high-quality steel company SSAB has set itself the goal of achieving leading profitability in the steel industry. However, operating profit for the full year of 2015 was negative and a loss of SEK 128 million ($ 15.2 million) compared to a SEK 894 million ($ 106 million) profit in 2014. The net cash flow was CZK 2.3 billion. Strong cash flows helped reduce net debt by SEK 1.5 billion in 2015, and the net debt /equity ratio was 52 percent at the end of the year.

An operating loss of SEK 802 million ($ 94.4 million) in the fourth quarter of 2015 compared to a profit of SEK 900 million a year earlier. This was driven by declining sales and steel prices in North America and Europe, resulting in the shutdown of SSAB Special Steels. Despite weak operating profit, net cash flow was positive in the fourth quarter, reaching SEK 1.5 billion.

Falling raw material prices and continued high imports from Asia put additional pressure on steel prices in both North America and Europe. Customers have delayed orders and reduced their inventory in hopes of taking advantage of the lower prices in early 2016. Underlying demand for steel was higher than explicit demand and the company believes it will improve sales across all markets in the first quarter of 2016.

The gain from the Rautaruukki acquisition during the fourth quarter reached 1.1 billion Swedish kronor. Synergy implementation is progressing better than planned. Therefore, the company raised its synergy target in 2016 and with full effect in 2017. In addition, the company intends to reduce costs and improve competitiveness. Coupled with this, it announced plans to cut the workforce within Scandinavian operations with a maximum of 465 employees. In 2016, the company expects to cut costs by SEK 1.25 billion compared to 2015. In 2017, costs are planned to be reduced by SEK 2.5 billion with the completion of the Rautaruukki acquisition.