By Marta Frackowiak
(Reuters) -Swedish steelmaker SSAB reported a steep fall in first-quarter earnings, but beat analyst expectations as its specialised products helped to offset price weakness and falling demand elsewhere.
The location of its facilities, close to customers in both Europe and the United States, has protected it from the impact of U.S. President Donald Trump’s tariffs, it said, although the outlook for the second quarter is “more uncertain than usual”.
Shares were up about 2.9% at 62.5 Swedish crowns at 1035 GMT.
Its earnings before interest, taxes, depreciation, and amortisation fell to 2.37 billion Swedish crowns in the January-March quarter from 4.14 billion crowns a year earlier, but still beat the Factset consensus by 13%, Jefferies said.
Jefferies said the beat was driven by the Special Steels division, and added that the European unit beat low expectations.
CEO Johnny Sjostrom told a call with analysts SSAB had not experienced order cancellations following Trump’s tariff announcement at the start of the month.
On the contrary, he said SSAB’s order intake in the U.S. for heavy industry such as energy, oil and gas, has been strong.
The consumer-related steel industry in the U.S., which includes steel for cars and new housing, has declined, but he said that was not a major part of SSAB’s business.
The company said it expected shipments by Special Steels, Europe and Americas divisions to be “somewhat higher” this quarter than in the previous one. The specialised steel includes high-strength and particularly hard-wearing products.
However, it said prices would vary across the three divisions – from “stable” for Special Steels to “somewhat higher” in the European unit and “significantly higher” in the Americas unit.
Raw material costs should be “stable” in the Special Steels and European units and “somewhat higher” in the Americas division, SSAB said.
J.P.Morgan said in a note to clients that SSAB’s guidance “points to a rising quarter-on-quarter EBITDA trajectory due to slightly higher shipments and steel prices”. ($1 = 9.6232 Swedish crowns)
(Reporting by Marta Frąckowiak in Gdansk; Editing by Rashmi Aich, Savio D’Souza and Barbara Lewis)
