Environment and Energy
High Plate Prices, Strong Dollar Boost SSAB Americas 4Q Earnings
January 27, 2023
Strong plate prices and a stronger US dollar helped SSAB Americas record higher earnings in the fourth quarter vs. the same quarter in 2021.
But Swedish parent company SSAB said plate prices have decreased from previous high levels.
“We saw that prices decreased somewhat in Q4 from very high levels, but all in all, a very strong achievement from North American plate or SSAB Americas,” SSAB president and CEO Martin Lindqvist said in an earnings call Friday.
The North American unit of SSAB posted adjusted operating result of 2.73 billion Swedish krona (SeK) ($264.3 million) in 4Q, up 25% from 2.19 billion SeK ($212.4 million) in the same quarter a year ago on revenue that increased 23% to 7.55 billion SeK ($732.5 million).
SSAB Americas reported shipments of 418,000 tonnes in 4Q vs. 413,000 tonnes a year earlier, while 1,748,000 tonnes for FY2022 were shipped compared with 1,871,000 tonnes in FY2021.
Outages at SSAB Americas cost 60 million SeK ($5.8 million) in the fourth quarter vs. 250 million SeK ($24.3 million) in the year-ago period. For full-year 2022, outages cost 395 million SeK ($38.3 million) vs. 250 million SeK in 2021. Maintenance costs for outages at SSAB Americas are expected to cost 175 million SeK ($17 million) in Q3 of this year, the company said.
SSAB Americas’ adjusted operating result for FY2022 more than doubled to 12.27 billion SeK ($1.19 billion) from 5.41 billion SeK ($524.8 million) in 2021 on revenue that increased 56% to 32.16 billion SeK ($3.12 billion).
The parent company reported an adjusted operating result of 3.77 billion SeK ($365.4 million) in 4Q, down from 6.96 billion SeK ($675.2 million) a year ago on revenue that increased 10% to 30.14 billion SeK ($2.92 billion).
For FY2022, SSAB swung to an operating loss of 4.36 billion SeK ($422.3 million) from an operating result of 18.84 billion SeK ($1.83 billion) a year earlier on revenue that increased 34% to 128.75 billion SeK ($12.48 billion).
The company reported a goodwill impairment of 33.3 billion SeK ($3.23 billion) in the fourth quarter.
Looking into 1Q 2023, SSAB said there is continued uncertainty against a background of rising inflation and interest rates as well as the risk of fallout from the war in Ukraine.
For North America, SSAB said SSAB Americas’ shipments are forecast to be somewhat higher and prices are expected to be lower. An upward turn in iron ore prices and scrap prices in the US will lead to higher costs during 1Q 2023, whereas coal costs are expected to be lower, the company said.
“We see relatively stable demand in North America for the market for heavy plates,” Lindqvist said, adding that the company has “introduced price increases from mid-March.”
By Ethan Bernard, ethan@steelmarketupdate.com
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