By Jagoda Darlak
(Reuters) -Finnish stainless steel maker Outokumpu on Tuesday beat expectations for first-quarter sales and earnings, sending its shares up nearly 10%, boosted by strong performance across the board even as volumes weakened from a year earlier.
The company’s adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) fell 42% to 204 million euros ($224.56 million) in the quarter, but exceeded analysts’ estimate of 144.5 million euros in a company-provided poll by 41%.
The group said distributors continued destocking during the first quarter in Americas and Europe, which negatively impacted delivery volumes.
Despite the heavy destocking, Outokumpu’s stainless steel deliveries rose 12% to 505,000 tonnes from the prior quarter.
Compared with a year earlier, they declined by 17%.
The company had seen its demand dip at the end of last year as a fallout of Europe’s energy crisis put pressure on steel prices, but had said it would start recovering in early 2023.
Stainless steel deliveries in the second quarter are expected to remain stable compared to the first quarter, the group said.
The World Steel Association upgraded its forecast for global steel demand in April, expecting it to rise by 2.3% this year.
Outokumpu also forecast a second-quarter adjusted EBITDA on a “similar or higher level” than in the first quarter.
JPMorgan said in a note to clients it saw a strong scope for a new shareholder returns in 2023 following the strong results.
Outokumpu completed a share buyback programme in March, and last month paid out a total dividend of 0.35 euro per share.
“We have a strong focus on shareholder returns,” CEO Heikki Malinen said in a statement.
($1 = 0.9084 euros)
(Reporting by Jagoda Darlak in Gdansk; Editing by Milla Nissi and Louise Heavens)
