By Jagoda Darlak
(Reuters) -Finland’s Outokumpu on Thursday called off immediate plans to invest in more stainless steel capacity in the U.S. and small nuclear production in Finland, as the weak stainless steel market and high import pressures weigh on earnings.
Outokumpu said it was shelving a plan to invest in added U.S. production capacity due to the “unpredictable” market environment, while it is seeking external parties to take over the development of a small modular reactor next to its site in Tornio, Finland.
The decision on the U.S. investment was made prior to the recently announced steel tariffs, and it does not mean Outokumpu will never invest in the United States, CFO Marc-Simon Schaar told Reuters.
“The American market is a very attractive market for us and will remain an attractive market for us,” he said.
Tariffs on imported goods into the European and American markets are generally beneficial for Outokumpu, Schaar added, as they help limit significant stainless steel imports, mainly from Asia, that are entering both markets.
Outokumpu’s shares were up 6.6% as of 1331 GMT.
The stainless steel manufacturer on Thursday also reported a small core loss of 3 million euros ($3.1 million) for the fourth quarter, like it had warned in December.
J.P.Morgan analysts said in a note that they considered the reported EBITDA loss “a less severe outcome” after the December profit warning.
Outokumpu expects its stainless steel deliveries to grow by 10% to 20% in the first quarter compared to the previous three months.
It also sees a quarter-on-quarter improvement in its EBITDA, even with an estimated 15 million euro impact from a one-week strike in Finland in January.
It proposed a dividend of 0.26 euro per share for 2024.
($1 = 0.9585 euros)
(Reporting by Jagoda Darlak in Gdansk and Anne Kauranen in Helsinki; editing by Milla Nissi)
