May 2024 | SSAB publishes interim report Q1 2024. Revenue was SEK 27,148 (31,904) million, Operating result was SEK 3,157 (4,733) million, Net cash was SEK 18.2 (15.6) billion.
SSAB’s operating result for the first quarter of 2024 amounted to SEK 3,157 (4,733) million. The decrease compared to a year earlier was primarily due to US plate prices that reversed from a high level. The market in Europe continued to be relatively weak, whereas the market for high-strength steel was more stable.
The transformation to fossil-free steelmaking continues and SSAB has taken a decision to invest EUR 4.5 billion in the steel mill in Luleå. Besides eliminating 7% of Sweden’s carbon dioxide emissions, the investment entails a string of other benefits including lower production costs, greater flexibility and a stronger product mix.
SSAB Special Steels had an operating result of SEK 1,781 (2,094) million and an operating margin of 23% (24%) during the quarter. SSAB Special Steels’ unique offering provides added value for our customers and this in turn translates into more stable prices than for standard products.
SSAB Americas’ operating result for the first quarter decreased to SEK 1,412 (2,675) million and the operating margin was 23% (35%), as prices weakened from a high level. SSAB Europe had an operating result of SEK 163 (0) million and an operating margin of 2% (0%). The market was weak and the political strikes in Finland had a negative effect of around SEK 350 million, while the development of high-strength steel for the car industry was good. The strike in April is estimated to impact the second quarter negatively by around SEK 125 million.
Both Tibnor and Ruukki Construction have implemented cost saving programs, including reduction of personnel, which will continue to have a positive impact in coming quarters. Safety performance continued to improve and LTIF decreased to 0.81 (0.92) during the quarter.
Investment decision of EUR 4.5 billion for fossil-free steel mill in Luleå
There is great interest in products with no carbon dioxide emissions and in early April SSAB took the decision to build a state-of-the art, highly-efficient mini-mill in Luleå. The new mill will have a capacity of 2.5 million tonnes a year with two electric arc furnaces, advanced ladle metallurgy and an integrated rolling mill.
The investment also includes a cold rolling and galvanizing complex to supply the vehicle industry with a broader offering of premium products.
The investment in Luleå amounts to EUR 4.5 billion including contingency. This will avoid replacement investments of around EUR 2 billion that would otherwise be needed until 2035 to sustain the current blast furnace, steel mill and coking plant in Luleå as well as the rolling mill in Borlänge.
The value creation will be significant, compared to the alternative of continuing to invest in the current system, and the annual EBITDA improvement is estimated to be more than SEK 5 billion at current commodity forecasts. The mill design includes a production increase of 0.5 million tonnes a year and improved mix with 1 million tonnes of special and premium steels a year.
The transformation of Luleå will reduce Sweden’s carbon dioxide emissions by 7% in addition to the 3% reduction from the conversion of the mill in Oxelösund.
About SSAB
SSAB is a Nordic and US-based steel company. With SSAB Fossil-free™ steel and SSAB Zero™, a largely carbon emission-free steel based on recycled steel, the company plans to reinvent the value chain from the mine to the end customer, largely eliminating carbon dioxide emissions from their own operations. SSAB has employees in over 50 countries and production facilities in Sweden, Finland and the US. SSAB is listed on Nasdaq Stockholm and has a secondary listing on Nasdaq Helsinki.
