This decision will affect 200 jobs

Finnish stainless steel producer Outokumpu reported a decline in underlying profit in the third quarter of 2023. The company also announced plans to reorganize its German division, which will affect about 200 jobs. Reuters informs about it.

The group said the restructuring in Germany will take place by centralizing the production of advanced materials at the Dillenburg plant and closing the service center in Hockenheim. These measures will result in annual savings of around €15 million and are expected to be completed no earlier than 2024.

Outokumpu’s adjusted EBITDA in the third quarter of 2023 fell by 83% y/y – to €51 million due to the continued weakness of European markets. This is below analysts’ forecast of €86.6 million, which was made during a survey conducted by the company.

The company’s July-September stainless steel shipments fell 9% year-on-year – to 449,000 tons, but are expected to grow by 0-10% in the fourth quarter.

«For the European business line, the market environment was even more difficult than during the pandemic,» CEO Heikki Malinen noted.

However, according to the company’s CEO, the negative trend seems to have bottomed out and Outokumpu has already seen some positive signals. However, it is predicted that the recovery of the market will take some time.

The company expects adjusted EBITDA for the fourth quarter of 2023 to be at or above the July-September level.

As GMK Center reported earlier, in August, Outokumpu announced that it is studying the possibilities of expanding production in the USA and seeks to increase competitiveness on the European market. The company will focus on strengthening its presence in the global market as part of the third stage of the development strategy, which will begin in 2026. The group has begun a feasibility study to expand operations in the United States and meet growing demand for domestic stainless steel.