Stainless steel maker Outokumpu steps up efforts to go greener

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The Outokumpu logo is seen at the company’s headquarters in Helsinki, Finland May 22, 2018. REUTERS/Jussi Rosendahl

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HELSINKI, Feb 8 (Reuters) – Finnish stainless steel maker Outokumpu (OUT1V.HE) will step up efforts to reduce its carbon footprint despite energy price pressures and fierce competition from less regulated Asian rivals, a the company announced on Tuesday.

Outokumpu said it would tie its management bonus plans to climate targets aimed at reducing emissions across its value chain by 30% below their 2020 level by 2030.

“It’s quite unique. In the stainless steel sector, we are the only one to have an emissions reduction target approved by an independent observer,” chief financial officer Pia Aaltonen-Forsell told Reuters, referring to the Science Based Targets initiative which revealed that Outokumpu’s goals were to be aligned with the Paris climate agreement.

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The European Union is in talks on its carbon reduction plan, which would include a carbon border adjustment mechanism to tax imports of goods made in countries with lower CO2 emission standards, seeking to equalize costs CO2 emissions. Read more

Outokumpu uses 90% recycled waste in its production and Aaltonen-Forsell has called on the EU to adopt a model in which all emissions, including those from raw materials, are taken into account.

Shares of the Finnish company fell more than 7% to 5.60 euros at 13:30 GMT on Tuesday after its first-quarter outlook disappointed investors.

Outokumpu said it expects adjusted earnings before interest, tax, depreciation and amortization (EBITDA) to remain at or above the fourth quarter of last year, a outlook described by analysts. of JP Morgan as “soggy”.

“You can drive a bus through the Q1’22 guidance for (adjusted) EBITDA,” the analysts wrote in a note, adding that the guidance could lead to lower consensus expectations for a 10% rise in earnings. quarter to quarter.

Aaltonen-Forsell estimated that the company’s energy costs in the first quarter would be up 20 to 25 million euros compared to the previous quarter.

She said the company had also been hit hard by the COVID-19 pandemic, with 10-20% of some sites’ workforce on sick leave or quarantine, though it had mostly been successful in mitigate the impact on its business.

Outokumpu reported fourth quarter adjusted EBITDA largely in line with expectations, fourth quarter sales up 64% to 2.22 billion euros and stainless steel shipments up 12%, both of which exceeded the forecasts. He also reported higher selling prices.

“However, profitability was impacted by a significant increase in energy and consumables prices as well as higher fixed costs,” he said in a statement.

Outokumpu’s board has proposed a dividend of €0.15 per share for 2021.

($1 = 0.8758 euros)

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Reporting by Anne Kauranen Editing by Jason Neely and David Goodman

Our standards: The Thomson Reuters Trust Principles.

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