NEW YORK SSAB Americas, a subsidiary of Swedish steelmaker SSAB AB, saw its first-quarter earnings squeezed due to softer U.S. prices and lower volumes.
SSAB Americas posted operating profit of 87 million kronor ($13.18 million) for the three-month period ended March 31, down 87 percent from the 670 million kronor income recorded in the same quarter a year ago.
The Stockholm-based parent company attributed depressed earnings in the Americas to a bottoming-out of prices in February, although it noted that price hikes by several producers, including SSAB, have helped prices stabilize.
"Economic activity in North America and Asia strengthened somewhat, while, as expected, the trend in Europe was very weak," Martin Lindqvist, president and chief executive officer of the Swedish parent company, said of first-quarter conditions.
SSAB Americas recorded 3.46 billion kronor ($524 million) in sales, down from 4.61 billion kronor a year ago. However, that was greater than the 3.24 billion kronor in sales recorded in the fourth quarter.
Meanwhile, first-quarter steel shipments from its Americas division fell 6 percent from the year-ago period but rose 11 percent quarter over quarter.
The company noted that demand from the energy segment grew strongly during the first quarter, while sales from the heavy transport segment also increased. Looking forward, it predicted that second-quarter earnings would be hurt by a 150-million-kronor ($22.7-million) reduction in earnings due to a planned outage at its facility in Montpelier, Iowa.
"The second quarter will be characterized by continued weak growth in Europe, although we do perceive a degree of recovery on the Nordic markets, a slow recovery in the U.S. and continued solid demand in Latin America," Lindqvist added.