LONDON Stainless steel producer Outokumpu Oyj posted a second-quarter net loss of 250 million ($330 million), 65 percent higher than a 152-million loss in the first three months of this year, due to a drop in deliveries, lower nickel prices and a weaker performance by its Americas operations.
Sales fell to 2.06 billion ($2.72 billion), down 7.1 percent in the same comparison.
"Outokumpus underlying result in the second quarter was in line with expectations but continued on a disappointing course. Our sales and profitability were negatively affected by the 20-percent decline in nickel price since the beginning of the year, poor economic environment and challenges in our Americas operations," Outokumpu chief executive officer Mika Seitovirta said. "During the second half, we will continue to focus on achieving additional savings across all of our operations to mitigate the weak stainless steel market outlook. ... We also have a clear action plan in place to improve our performance in our Americas operations."
One-tenth of the second-quarter loss was related to operations at Acciai Terni Speciali SpA in Italy, which Outokumpu is required to divest as part of the conditions for the European Commissions approval of the 2.7-billion ($3.56-billion) merger with ThyssenKrupp AGs former Inoxum division.
The ramp-up of a ferrochrome project offset some of the companys losses, Seitovirta said. "Our ferrochrome operations and synergy cost savings efforts continued to progress ahead of plans. (Production in the first six months of 2013) reached 209,000 tonnes, boosting our confidence in reaching our full-year production target of 400,000 tonnes."
Seitovirta remained optimistic about meeting the synergy savings target related to the merger. "Inoxum acquisition-related synergy savings reached 39 million ($51 million) during the first half," he said, "indicating that we will exceed our original target of 50 million ($66 million) savings in 2013."
A version of this article was first published by AMM sister publication Steel First.