Outokumpu sees muted Q4 as weak European demand weighs on earnings

Finland's Outokumpu forecast a flat fourth-quarter core profit after its third-quarter earnings met market expectations on Friday, as costs rise and weak European stainless steel demand weighs on deliveries. European steelmakers have been grappling with weak demand, competition from lower-priced Asian imports and high energy and raw material costs. Tighter EU trade protections have started to curb imports, but the impact on producers' earnings remains uncertain amid subdued end-market demand. "Although policy mechanisms contributed to a decline in stainless steel imports, the lower import volumes were not enough to offset the broader market weakness," Outokumpu CEO Kati ter Horst said in a statement. Outokumpu's adjusted earnings before interest, taxes, depreciation and amortisation were €101 million ($113 million) in the third quarter, matching analysts' forecast in a company-provided poll. Stainless steel deliveries fell 7% quarter-on-quarter to 454,000 metric tons. The company, whose stainless steel products are used in tanks, facades and consumer goods such as washing machines, expects shipments to decline by a further 5% to 15% in the fourth quarter. It also forecast fourth-quarter adjusted EBITDA at a similar level to last year's €10 million, citing higher costs and lower delivery volumes across its businesses. The biggest impact is expected in the European business, where demand is expected to remain weak and customer inventory levels elevated, it said.