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Feb 4 (Reuters) - Finnish steelmaker Outokumpu on Thursday reported fourth-quarter core operating profit up 7% year on year, beating analyst forecasts, with recovering demand for stainless steel outweighing a drop in prices.
The company forecast that deliveries in the first quarter of this year should rise by 10-20% rise from the previous three months, helping to secure profit growth.
“The stainless steel market has begun to recover after the global downturn caused by the COVID-19 pandemic,” it said. “Demand for stainless steel is strengthening and both business areas, Europe and (the) Americas, are expected to see a seasonal increase in volumes.”
Outokumpu reported fourth-quarter adjusted earnings before interest, tax, depreciation and amortisation of 78 million euros ($94 million), up from 73 million euros a year earlier, beating analyst forecasts in a poll provided by the company.
Jefferies analysts called the quarterly result “a blowout” thanks to profit roughly double expectations.
Deliveries of stainless steel rose 7% to 523,000 tonnes, beating a consensus analyst forecast of 518,100 tonnes.
The company also reduced net debt to 1.03 billion euros, its “lowest in recent history”, said Chief Executive Heikki Malinen.
Shares in Outokumpu rose 1.6% in morning trade. (Reporting by Tarmo Virki in Tallinn Editing by David Goodman)