Outokumpu's Third Quarter Report 2024: Stable adjusted EBITDA

Outokumpu released its interim report for January to September 2024, showing robust results for the third quarter. The company’s adjusted EBITDA rose significantly, reaching €86 million, supported by solid performance in its European and Ferrochrome business units. Although stainless steel deliveries decreased slightly, Outokumpu maintained strong market positions in both Europe and North America, ranking first and second, respectively.

Kati ter Horst, who assumed the role of President and CEO on October 1, expressed confidence in Outokumpu's strategic direction and praised the groundwork laid by her predecessor, Heikki Malinen. “It is an honor to take on the role of President and CEO of Outokumpu, with the opportunity to lead the company into its next strategic phase,” she stated, underscoring her commitment to a seamless leadership transition and the continued pursuit of the company’s target of achieving €350 million in EBITDA by the end of 2025.

Market Challenges and Strategic Response

The report highlighted Outokumpu’s resilience amid challenging market conditions, including rising import pressures in Europe and North America that contributed to price competition within the stainless steel sector. Ter Horst noted that “the disciplined management of our financial metrics enables us to respond quickly to changes in the market environment,” emphasizing the importance of financial rigor as the company adapts to evolving demands.

Outokumpu’s European business saw a rise in adjusted EBITDA to €59 million, with stable delivery volumes. In contrast, the Americas business reported a decline in deliveries and adjusted EBITDA, impacted by both a downturn in the manufacturing sector and flood-related supply delays in Mexico. Despite these challenges, Ter Horst affirmed Outokumpu’s long-term growth outlook for the U.S. market.

Operational and Environmental Milestones

The company’s Ferrochrome segment was a notable contributor, delivering a solid adjusted EBITDA of €29 million, supported by efficient operations and steady demand for low-emission ferrochrome steel. Outokumpu’s Kemi Mine in Finland, which boasts the lowest carbon footprint of any chromite mine globally, remains a cornerstone of the company's sustainability efforts. Ter Horst highlighted this commitment, sharing that “decarbonization is a central element of Outokumpu’s strategy,” and reaffirmed that the mine is on track to become the world’s first carbon-neutral chromium mine by 2025.

Safety continues to be a top priority, with Outokumpu achieving industry-leading safety performance, despite a slight uptick in incident rates in the third quarter. “We want to ensure that every one of our employees returns home safe and healthy each day,” Ter Horst remarked, reflecting the company’s focus on maintaining high safety standards.

Financial Overview and Q4 Outlook

Outokumpu reported a slight dip in third-quarter sales, totaling €1.518 billion, down from €1.531 billion in Q3 2023. Stainless steel deliveries for the first three quarters of 2024 reached 1.371 million tonnes, a 6% decrease from the prior year, impacted by a political strike in Finland that disrupted operations across Europe and North America. Adjusted EBITDA for the first nine months of 2024 was €180 million, compared to €445 million in the same period of 2023. The net result for Q3 2024 improved to €20 million, up from a loss of €55 million in Q3 2023, translating to earnings per share of €0.05.

Looking to Q4, Outokumpu expects stainless steel deliveries to decline by 0-10% due to market headwinds in both Europe and America. The planned maintenance shutdown in Tornio, Finland, is anticipated to reduce European adjusted EBITDA by approximately €10 million, and rising energy costs are likely to add €5 million in expenses. Additionally, losses from commodity-related inventory and hedging activities may affect profitability in the fourth quarter.

Commitment to Sustainability and Innovation

A hallmark of Outokumpu’s strategy remains its environmental commitment, with 95% of materials sourced from recycled raw inputs—one of the highest recycling rates in the steel industry. This commitment, Ter Horst shared, supports Outokumpu’s goal to maintain the industry’s lowest carbon footprint. “We are resolutely advancing on our path to decarbonization and are making good progress,” she stated, reinforcing the company’s position as a leader in sustainable steel production.

Source and Photo: Outokumpu