27/07/2022 – SSAB Interim Report Q2/2022
Record results for all business units
SSAB's operating profit exceeded SEK 10 billion for the first time in a quarter and amounted to SEK 10.4 (4.1) billion. All business areas delivered strong results and cash flow, driven by a combination of high steel prices and solid internal performance.
The Swedish company strengthens its position as a leader in the transition of the steel industry and continues to deliver pilot volumes for a number of selected partnership projects. During the second quarter, the world’s first construction machine built using SSAB fossil-free steel was delivered by Volvo.
SSAB Special Steels reached a new record for shipments and operating profit increased to SEK 2,392 (1,175) million. The operating margin rose to 26.6% (20.1%). High-strength steel is SSAB’s primary area of growth and it supports our customers’ ambitions to improve productivity and sustainability performance in machinery and other equipment. SSAB Europe’s operating profit for the second quarter increased to SEK 4,070 (1,512) million and the operating margin rose to 28.3% (14.8%). SSAB Americas’ operating profit increased to SEK 3,512 (1,084) million and the operating margin rose to 39.7% (22.5%).
Higher steel prices were an important factor behind the improved results, in combination with stable production and continued good cost control. Safety performance continued to improve and Lost Time Injury Frequency (LTIF) decreased to 1.56 (2.30).
In conjunction with the invasion of Ukraine, SSAB stopped sales to Russia and Belarus as well as discontinued new purchases of ore and coal from Russia. Ruukki Construction has minor operations in Ukraine and these could be partly re-started during the second quarter.
The market outlook is uncertain, due to rising inflation, component shortages and bottlenecks in logistics chains, among other things. There are also risks for disruptions relating to sanctions and other fallout from the war in the Ukraine.
Customer demands for fossil-free steel continues to increase. Lately, Volvo Construction Equipment delivered the world’s first construction machine built of SSAB fossil-free steel and during the third quarter of 2022, Volvo Trucks will start small-scale introduction of fossil-free steel in heavy-duty electric trucks. SSAB also began a collaboration with Alfa Laval on the world’s first heat exchanger to be made by using fossil-free steel, with the first unit planned for 2023. The second quarter saw the inauguration of “Hybrit”’s pilot facility for hydrogen gas storage, the first of its kind, in Svartöberget, Luleå. Work on the feasibility studies for SSAB’s planned mini-mills in Luleå and Raahe is proceeding towards the goal of fossil-free production at around 2030, but the transition requires sufficient availability of fossil-free electricity in the right place at the right time.