Outokumpu's second quarter 2010 - return to pro...

PRESS RELEASE
July 22, 2010 at 9.10 am

Highlights

- Operating profit EUR 71 million, underlying operational result some EUR 16
million
- Deliveries and prices improved clearly from the second quarter of 2009
- Third-quarter underlying operational result expected to be somewhat negative
due to seasonality, underlying demand continues to recover
- Investments in ferrochrome and quarto plate production decided


Group key figures, EUR million                II/10 II/09  I/10
---------------------------------------------------------------


Sales                                          1110   617   916

Operating profit                                 71   -94   -22

Profit before
taxes                                            63  -105   -33

Net profit for the
period                                           44   -87   -21

Earnings per share,
EUR                                            0.24 -0.48 -0.12

Net cash generated from operating
activities                                     -314    21   -86



Stainless steel deliveries, 1000
tonnes                                          339   268   333

Stainless steel base price, EUR/t
1)                                            1 317 1 117 1 235

Stainless steel transaction price,
EUR/t                                         3 018 1 751 2 329



1)  CRU: German base price (2mm cold rolled
304 sheet)


Underlying demand for standard grades continues to recover and this is expected
to continue also after the holiday season. Demand for special grades is still
lagging. However, commercial activity in the investment-driven customer segments
continues and is expected to generate orders within the next 6-12 months.
Currently the holiday season and the declined nickel price are causing some
hesitance among the stainless distributors to place orders.

Outokumpu's deliveries of stainless steel increased by 26% to 339 000 tonnes in
the second quarter compared to the same quarter in 2009. Base prices improved by
18%. Transaction prices, which also include raw material costs, were as much as
72% higher than a year ago. Out of the raw material prices, the average nickel
price was 74% higher and ferrochrome 97% higher than in 2009. As a result,
Outokumpu's sales grew as much as 80% to EUR 1 110 million in the second
quarter.

Compared to the first quarter of 2010 Outokumpu's second-quarter deliveries were
at about the same level and the Group's capacity utilisation remained around
75%. This combined with the positive price development, however enabled
Outokumpu to return to profit after seven loss-making quarters. The underlying
operational result was positive at EUR 16 million compared with a loss of EUR
32 million in the first quarter of 2010 and a loss of EUR 94 million a year ago.
Additionally, Outokumpu recorded some EUR 55 million of raw material-related
inventory gains increasing the operating profit to EUR 71 million (EUR -94
million in 2009). The increase in working capital due to higher inventory levels
and raw material prices resulted in strongly negative cash flow for the quarter.

The slow-down in demand during the holiday season and annual maintenance breaks
at the Group's mills will result in stainless delivery volumes for the third
quarter to be 10-20% lower than in the second quarter. The underlying
operational result in the third quarter is expected to be somewhat negative.
Operative cash flow in the quarter is expected to turn positive subject to metal
price development.

In June, Outokumpu decided on two strategic investments amounting to EUR 550
million. The production capacity of ferrochrome in Tornio, Finland will be
doubled and the production capability of quarto plates will be improved in
Degerfors, Sweden. In July, the Finnish Parliament gave Fennovoima a permit to
build a nuclear power plant in Finland. Fennovoima is a Finnish energy company
that was established in 2007 with an aim to construct a new nuclear power plant
in the country. Outokumpu owns about 10% of Fennovoima.

CEO Juha Rantanen:

"After several loss-making quarters it is gratifying to present Outokumpu's
return to profits in the second quarter. A clear recovery in the standard grades
business and improved prices have been the main factors, while business in
capital investment-driven special grades is still lagging. As always, the third
quarter is expected to be seasonally weak. We are confident that underlying
demand continues to improve and we are making preparations to take full
advantage of a recovery in demand after the holiday season.

Outokumpu made some major news announcements during the second quarter. The
market recovery and our financial performance enabled us to embark on two
important strategic investments. The expansion in ferrochrome production is not
only about raw material self-sufficiency but also about growth. The investment
in quarto plate production solidifies our leading position in the tailor-made
plate business, strongly supporting our special grades strategy."

This press release is a summary of Outokumpu's official second quarter 2010
report.

For further information, please contact:

Päivi Lindqvist, SVP - Communications and IR
tel. [phone], mobile [phone]
[e-mail]

Ingela Ulfves, VP - Investor Relations and Financial Communications
tel. [phone], mobile [phone]
[e-mail]

Esa Lager, CFO
tel [phone]
[e-mail]

OUTOKUMPU OYJ


Outokumpu is a global leader in stainless steel with the vision to be the
undisputed number one. Customers in a wide range of industries use our stainless
steel and services worldwide. Being fully recyclable, maintenance-free, as well
as very strong and durable material, stainless steel is one of the key building
blocks for sustainable future. Outokumpu employs some 7 500 people in more than
30 countries. The Group's head office is located in Espoo, Finland. Outokumpu is
listed on the NASDAQ OMX Helsinki.
www.outokumpu.com


[HUG#1433333]





    ENG Q2 results media release: 

http://hugin.info/3010/R/1433333/379195.pdf



This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients. 
The owner of this announcement warrants that: 
	(i) the releases contained herein are protected by copyright and other applicable laws; and 
	(ii) they are solely responsible for the content, accuracy and originality of the information contained therein. 
All reproduction for further distribution is prohibited.
		
Source: Outokumpu Oyj via Thomson Reuters ONE