Outokumpu's third quarter 2010 - seasonally low...

PRESS RELEASE
October 21, 2010 at 9.10 am EET

Outokumpu's third quarter 2010 - seasonally lower demand resulted in a loss-
making quarter

Highlights

- Operating loss EUR 49 million, underlying operational result some EUR -10
million
- Deliveries down from the second quarter but 29% higher than in the third
quarter of 2009
- Fourth-quarter underlying operational result expected to improve to around
break-even due to higher volumes but somewhat softer prices

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


 Sales                                               999      587    1110

 Operating profit                                    -49      -65      71

 Profit before taxes                                 -88      -81      63

 Net profit for the period                           -56      -56      44

 Earnings per share, EUR                           -0.31    -0.31    0.24

 Net cash generated from operating activities       -112      -10    -314



 Stainless steel deliveries, 1000 tonnes             307      238     339

 Stainless steel base price, EUR/t 1)              1 245    1 307   1 317

 Stainless steel transaction price, EUR/t          2 866    2 229   3 018



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



There has been some pick-up in demand for stainless steel standard grades after
the summer period in Europe. The increasing price of nickel has had a positive
effect on mainly distributors' buying behaviour. Demand for special grades,
however, continues to be softer and no clear recovery from investment-driven
end-use segments has taken place.

Outokumpu's deliveries increased by 29% to 307 000 tonnes in the third quarter
compared to the same quarter in 2009. Average base prices were 5% lower than a
year ago. Main raw material prices continued to be clearly higher than in 2009.
Average nickel price increased by 20% and ferrochrome price by 46%. As a result,
Outokumpu's sales were significantly, 70%, higher than in 2009, at EUR 999
million.

Compared to the second quarter of 2010 deliveries declined by 9% as demand was
weaker due to the European holiday season and the Group had its annual
maintenance breaks. Lower deliveries and rather stable prices drove Outokumpu's
underlying operational result in the third quarter to a small loss of EUR 10
million. In addition, there were EUR 39 million of raw material-related
inventory losses resulting in an operating loss of EUR 49 million for the
quarter. In the third quarter 2009, the underlying operational loss totalled EUR
82 million and operating loss EUR 65 million. Raw-material related inventory
gains were EUR 32 million. The main contributor to the significant reduction in
the underlying operational loss for 2010 is higher delivery volume. Net
financial expenses were clearly higher than a year ago deepening the pre-tax-
loss to EUR 88 million - higher than in the third-quarter 2009 - and earnings
per share to EUR -0.31 -  the same level as in 2009. Working capital continued
to increase resulting in negative cash flow in the third quarter 2010.

Outokumpu's deliveries in the fourth quarter are expected to improve from the
third quarter and be close to the volumes in the second quarter (339 000
tonnes). The underlying operational result in the fourth quarter is expected to
be around break-even. Subject to metal price and currency developments, cash
flow is expected to be positive as a consequence of reduced inventories.

CEO Juha Rantanen:

"Outokumpu's third-quarter loss is mainly a result of the seasonal decline in
delivery volumes. We'll get back on the improving profit trend as we foresee
better results in the fourth quarter compared to the third quarter this year and
the fourth quarter a year ago. Underlying demand for standard grades continues
to be satisfactory while the expected recovery in demand from investment-driven
industries has not materialised yet. Customers are hesitant to make investment
decisions due to overall macroeconomic uncertainty. This is the main reason why
we are still operating at only 75% of our capacity. The recent currency
fluctuations are also having a negative impact on our performance and overall
market sentiment.

We are confident, however, of the attractiveness of the stainless industry.
Several global trends are supporting the long-term growth of stainless markets.
Outokumpu is uniquely positioned to capture these opportunities due to Tornio's
cost competitiveness and our capabilities in the specialties products. The
recently revised strategy provides concrete plans on how we will improve the
profitability for the Group."

This press release is a summary of Outokumpu's official third 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#1453634]





ENG Q3 Media release 21102010: 


http://hugin.info/3010/R/1453634/394105.pdf




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