Rautaruukki Corporation's Interim Report for Ja...

Rautaruukki Corporation Interim report 17 July 2009 at 9am

Summary of first-half results for 2009 (reference period January-June
2008)
- Consolidated net sales decreased to EUR 944 million (2,008)
- Consolidated reported negative operating profit was -EUR 230
million and operating profit excluding non-recurring items was -EUR
225 million (309 reported and 314 comparable)
- Result before taxes -EUR 249 million (308)
- Gearing ratio was 22.9 per cent (5.8)
- Cash flow from operating activities was EUR 82 million (289)
- Return on capital employed (rolling 12 months) was 1.9 per cent
(28.6)
- Earnings per share were -EUR 1.33 (1.65)
- Based on efficiency improvement actions and adjustment measures
under way, lower costs of raw materials used in steel production and
improved cost efficiency in steel production, the company estimates
there will be a marked improvement in the result before taxes for the
second half of the year compared to the first half, but might remain
slightly negative.


KEY FIGURES
                               Q1-Q2/09 Q1-Q2/08  Q2/09  Q2/08   2008
Net sales, EUR m                    944    2 008    438  1 069  3 851
Operating profit, EUR m            -230      309   -117    166    568
Operating profit, excluding
non-recurring items, EUR m         -225            -112           584
Operating profit as % of net
sales                             -24.3     15.4  -26.7   15.5   14.7
Operating profit as % of net
sales, excluding non-recurring
items                             -23.8           -25.6          15.3
Result before taxes, EUR m         -249      308   -127    167    548
Earnings per share, EUR           -1.33     1.65  -0.68   0.89   2.93
Return on capital employed
(rolling 12 mths), %                1.9     28.6                 25.6
Gearing ratio, %                   22.9      5.8                  7.9
Personnel, average               13 165   14 986 12 870 15 327 14 953



First half of 2009 in brief:

- Caution in investment decisions and poor functioning of the
financial markets continued to be reflected in sales of construction
products and solutions in particular.
- In the engineering business, delivery volumes to equipment
manufacturers in the energy industry remained at a good level.
However, high stock levels throughout the supply chain weakened
demand especially from equipment manufacturers in the lifting,
handling and transportation industry.
- Poor demand for steel products continued and prices of steel
products were low. The fall in prices started to level off towards
the end of the report period. The operation of steel production at a
low capacity utilisation rate weakened financial performance
considerably.
- The weakening of a number of sales currencies against the euro
decreased consolidated net sales.
- Cash flow from operating activities was positive and the company's
financial position remained strong.
- Cost savings through operational efficiency improvement actions and
adjustment measures are expected to impact in full during the second
half of the year.

President & CEO Sakari Tamminen:
"Exceptionally weak market conditions in countries where Ruukki
operates continued into the second quarter and it is still difficult
to predict market development. In many of our customer industries,
de-stocking has taken longer than expected. This in turn has led to
lower delivery volumes than we expected for the second quarter.
Within construction, demand was especially slow in commercial and
industrial construction.

Weak earnings performance was mainly attributable to lower sales
volumes and the low steel production capacity utilisation rate. The
low capacity utilisation rate in steel production had a negative cost
impact of around EUR 160 million. Profitability was additionally
burdened by lower selling prices. We started up the idle blast
furnace at the Raahe Works in May, but this still did not yet
significantly reduce the cost per unit of steel produced during the
second quarter.

We have adjusted our operations corporate-wide because of weak market
conditions. In addition, we continued with our operational excellence
programme Boost, which we initiated last year to further improve
operational efficiency. Cost savings from the Boost programme and
adjustment measures are expected to be in the region of EUR 80
million for the current year. The impact on costs will be seen in
full during the second half of the year.

Within our operations the engineering business succeeded best in
adjusting to rapidly weakened market conditions. Whereas, it has
proved to be very difficult to adjust our steel business to such a
sharp decline.

The cost-efficient manufacturing network of our engineering business,
together with our presence in Poland, Hungary and China, provides us
with promising potential to deliver competitive products and services
to our customers. In construction, we still see good potential within
infrastructure construction. However, for commercial and industrial
construction to pick up, customers' willingness to invest needs to be
restored. A strong need still exists for new and renovation
construction in all countries in Eastern Europe.

There are signs that the market will pick up towards the end of the
year in some of our customer segments as a result of falling stock
levels. Based on efficiency improvement actions and adjustment
measures under way, lower costs of raw materials used in steel
production and improved cost efficiency in steel production, the
company estimates there will be a marked improvement in the result
before taxes for the second half of the year compared to the first
half, but might remain slightly negative."


For further information, please contact:

Sakari Tamminen, President & CEO, tel. [phone]
Mikko Hietanen, CFO, tel. [phone]


Press conference
A press conference, in Finnish, for analysts and the media will be
held on Friday 17 July at 10.30am at Ruukki, Suolakivenkatu 1, 00810
Helsinki.

The English webcast and conference call for investors and analysts
will begin at 2pm Finnish time and can be viewed live on the
company's website at www.ruukki.com/investors. A replay of the
webcast can be viewed on the same site from about 6pm Finnish time.

To attend the conference call, please call the following number 5-10
minutes before the conference begins: [phone], password:
Rautaruukki

A recording of the conference call can be heard until 22 July 2009 at
the following number:
[phone], access code: 839386

Rautaruukki Corporation
Anne Pirilä
SVP, Corporate Communications and Investor Relations

Rautaruukki supplies metal-based components, systems and integrated
systems to the construction and engineering industries. The company
has a wide selection of metal products and services. Rautaruukki has
operations in 26 countries and employs 13,000 people. Net sales in
2008 totalled EUR 3.9 billion. The company's share is quoted on
NASDAQ OMX Helsinki (Rautaruukki Oyj: RTRKS). The Corporation uses
the marketing name Ruukki. www.ruukki.com


DISTRIBUTION:
NASDAQ OMX Helsinki
Main media
www.ruukki.com



RAUTARUUKKI CORPORATION'S INTERIM REPORT FOR JANUARY-JUNE 2009

Business environment

Exceptionally weak global economic development continued during the
second quarter and there was a marked fall in gross domestic product
in a number of countries in which Ruukki has operations. Likewise,
there was a sharp decline in world trade and industrial production
during the report period. However, the first signs of economic
development levelling off were seen towards the end of the report
period.

Growing market uncertainty and caution in investment and financing
decisions still continued during the second quarter. On the one hand,
an appreciable weakening against the euro of many currencies in
Eastern Europe and the Nordic countries has eroded competitiveness in
the eurozone but, on the other hand, has increased the interest of
actors in the eurozone in local production in Central Eastern Europe
and Russia.

Seasonal growth in demand within construction during the second
quarter was below that of previous years. Seasonal demand for
residential roofing products grew more than that for commercial and
industrial construction products. Tight financial markets and caution
in customer decision-making impacted on the demand for commercial and
industrial construction solutions and products in particular.

In the engineering industry, deliveries to equipment manufacturers in
the energy industry during the first half of the year continued at
the good level experienced during the previous year. However, high
stock levels throughout the supply chain weakened demand especially
in the lifting, handling and transportation equipment industry.

Delivery volumes from steel companies remained much lower than
end-customer demand also during the second quarter. In the steel
industry, de-stocking has taken longer than expected and this in turn
has had a marked impact on delivery volumes. The global capacity
utilisation rate in the steel industry remained unprecedentedly low
throughout the report period.

Prices of steel products fell sharply during the first half of the
year. The first international agreements on the prices of the main
raw materials - coal and iron ore - used in steel production were
signed during the spring and early summer. These agreements to some
extent levelled off the falling prices of steel products as
uncertainty about raw material costs gradually faded. Lower stock
levels also partly supported price development.

Net sales for January-June

Unless otherwise stated, the comparable figures in brackets refer to
the same period a year earlier.

Consolidated net sales for January-June 2009 were EUR 944 million
(EUR 2,008 million reported and EUR 1,985 million comparable).

The solutions businesses - Ruukki Construction and Ruukki Engineering
- accounted for 51 per cent (45) of consolidated net sales during the
report period. Finland accounted for 32 per cent (32) of consolidated
net sales, the other Nordic countries for 33 per cent (33) and
Central Eastern Europe, Russia and Ukraine for 17 per cent (18). The
rest of Europe accounted for 14 per cent (14) and other countries for
4 per cent (3) of net sales.

Ruukki Construction's net sales for the first half year were EUR 278
million (509) and Ruukki Engineering's net sales were EUR 200 million
(394). Ruukki Metals' net sales were EUR 467 million (EUR 1,105
million reported and EUR 1,082 million comparable).

Ruukki Construction's net sales were particularly affected by
continued weak demand in commercial and industrial construction.
Customers' difficulties in arranging funding and increasing caution
in decision-making delayed the start of many construction projects
and, in some countries in Central Eastern Europe, Russia and Ukraine,
projects were even discontinued. Net sales were down compared to the
previous year also because of the weakening of a number of sales
currencies against the euro. Infrastructure construction net sales
declined less than those of commercial and industrial construction.

Ruukki Engineering's deliveries to equipment manufacturers in the
energy industry, both in wind and diesel power plants, continued at a
good level. Customers' weak order books, especially in equipment
manufacture in the lifting, handling and transportation industry,
reduced order intake. Lower delivery volumes decreased Ruukki
Engineering's net sales. There were also few deliveries to
shipbuilding and offshore customers.

Ruukki Metals continued to experience weak demand for steel products
almost throughout the first half of the year. De-stocking was still
ongoing in the market during the second quarter, which partly
affected the number of deliveries. A low level of activity in the
lifting, handling and transportation equipment industry decreased
sales of special steel products in particular. Special steel products
accounted for 19 per cent (27) of Ruukki Metals' net sales during the
report period. Likewise, sales of stainless steel and aluminium, sold
as trading products, were down year on year.


Second quarter net sales

Consolidated net sales for the second quarter were EUR 438 million
(EUR 1,069 million reported and EUR 1,060 million comparable).

Ruukki Construction's second quarter net sales were EUR 145 million
(285). Consistent with normal seasonal fluctuation, sales of
residential roofing products were brisker during the second quarter
of the year than during the first. There was a continued low level of
activity in commercial and industrial construction.

Ruukki Engineering's second quarter net sales were EUR 75 million
(205). The division's net sales were affected by de-stocking
throughout the supply chain. This resulted in a continued decrease in
demand during April-June.

Ruukki Metals' second quarter net sales were EUR 218 million (EUR 580
million reported and EUR 571 million comparable). Weak demand
continued during April-June, but picked up somewhat towards the end
of the quarter. Prices of steel products continued to fall during the
second quarter, but levelled off towards the end of the report
period.


Operating profit for January-June

Consolidated reported negative operating profit for January-June was
-EUR 230 million and operating profit excluding non-recurring items
was -EUR 225 million (EUR 309 million reported and EUR 314 million
comparable). Both reported operating profit and operating profit
excluding non-recurring items equated to -24 per cent (15 per cent
reported and 16 per cent comparable) of net sales.

Ruukki Construction posted a negative operating profit of -EUR 22
million (59). Ruukki Engineering's reported negative operating profit
was -EUR 2 million (66) and operating profit excluding non-recurring
items was EUR 3 million. Ruukki Metals' negative operating profit was
-EUR 199 million (EUR 197 million reported and EUR 202 million
comparable).

Ruukki Construction's operating profit fell particularly as a result
of lower sales volumes coupled with lower selling prices. Selling
prices of construction products fell during the first half of the
year, especially in Central Eastern Europe. However, the fall in
prices levelled off towards the end of the second quarter. Also, high
costs, which were still unable to be fully aligned to lower sales,
weakened profitability. In addition, the use of own steel produced at
high raw material prices and the use of high-cost external material
in stock continued to affect profitability also during the second
quarter.

Ruukki Engineering's operating profit was weakened by lower sales
volumes, lower selling prices - especially for plate products and
parts - as well as by the use in these products of steel produced at
high raw material prices. The division took a non-recurring charge of
EUR 5 million on the planned closure of the units in Hässleholm and
Oskarström in Sweden. This charge was booked in the second quarter.

Ruukki Metals' negative operating profit was mainly due to the
continued sluggish demand for steel products. In addition, poor price
development and the unwinding of stocks produced at high raw material
prices weakened profitability.

The low steel production capacity utilisation rate considerably
increased the fixed costs per unit of steel produced and had a
negative impact of around EUR 160 million on costs for January-June.
Restarting the idle blast furnace at the Raahe Works gradually
increased steel production capacity utilisation rates since early
May, although still did not yet significantly reduce the cost per
unit of steel produced.

Actions to improve operating efficiency and adjust operations have
only partly impacted on profitability during the first half of the
year. Cost savings are expected to impact in full during the second
half of the year.


Second quarter operating profit

Consolidated reported negative operating profit for April-June was
-EUR 117 million and operating profit excluding non-recurring items
was -EUR 112 million (EUR 166 million reported and EUR 172 million
comparable). Reported operating profit equated to -27 per cent and
operating profit excluding non-recurring items equated to -26 per
cent (16 per cent reported and 16 per cent comparable) of net sales.

Ruukki Construction's negative operating profit for April-June was
-EUR 9 million (38). Ruukki Engineering's reported negative operating
profit was -EUR 7 million (35) and operating profit excluding
non-recurring items -EUR 2 million.

Ruukki Metals' negative operating profit was -EUR 97 million (EUR 100
million reported and EUR 106 million comparable). During the second
quarter, low steel production capacity utilisation rate had a cost
impact of around -EUR 70 million (Q1/2009: -EUR 90 million). The cost
of a strike and writedowns on stocks weakened second quarter earnings
by around EUR 11 million.


Financial items and earnings for January-June

Net finance expense and exchange rate differences relating to finance
totalled EUR 19 million (3), including the arrangement fee of around
EUR 5 million for a new revolving credit facility. Net interest costs
rose by around EUR 8 million and totalled around EUR 13 million (5).

Group taxes were -EUR 65 million (78), which includes a decrease of
EUR 61 million (8) in deferred tax.

Earnings for the period were -EUR 184 million (229).

Earnings per share were -EUR 1.33 (1.65).


Balance sheet, cash flow and financing

The consolidated balance sheet total at 30 June 2009 was EUR 2,488
(2,903), EUR 415 million lower than at 30 June 2008 and EUR 495
million lower compared to the closing balance sheet for 2008. Equity
at 30 June 2009 was EUR 1,587 million (1,874) equating to EUR 11.43
per share (13.51). The decrease in equity since year-end 2008 was
mainly attributable to the loss posted for the first half of 2009 and
dividends paid out during the report period. The equity ratio at the
end of the report period was 64.3 per cent (66.1).

Return on equity during the past 12 months was -0.5 per cent (23.3)
and return on capital employed was 1.9 per cent (28.6).

During January-June, acquisitions resulted in an increase of EUR 8
million in property, plant and equipment and an increase of EUR 3
million in goodwill to EUR 103 million.

Cash flow from operating activities was EUR 82 million (289) and cash
flow before financing activities was -EUR 6 million (192). EUR 215
million was released from net working capital during the report
period.

Net interest-bearing financial liabilities at 30 June 2009 were EUR
364 million (109) and the gearing ratio was 22.9 per cent (5.8).

In June, the company signed a revolving credit facility of EUR 350
million. The loan replaced a credit facility of EUR 300 million
signed in April 2005. The new facility has a maturity of three years
and can be used flexibly for general corporate purposes.

At the end of June 2009, the Group had liquid assets of EUR 102
million and undrawn revolving credit facilities of EUR 350 million.


Actions to improve operational efficiency and adjust operations

In October 2008, Ruukki initiated its corporate-wide Boost programme,
which aims at further operational efficiency and at permanently
improving the company's competitive edge and profitability.

The company continued work on actions implemented under the Boost
programme during the report period and cost savings achieved during
January-June totalled around EUR 22 million.

In the context of the programme, Ruukki Construction implemented a
number of production arrangements between sites during the first half
of the year. Efficiency has been improved by centralising production,
which has resulted in the closure of production sites in the Baltics
(Latvia and Lithuania) and Central Eastern Europe (Czech Republic). A
number of actions to improve efficiency are still under way at other
sites, including Oborniki in Poland and Obninsk in Russia. These
projects are progressing to plan.

In March, the company decided to integrate production at its plants
in Kalajoki, Finland, where it has plants serving construction and
the engineering industry. In future, both plants will manufacture
components for the engineering industry.

During the first quarter, Ruukki Engineering improved operational
efficiency by transferring production lines and by adjusting
production. In May, the division announced plans to discontinue the
manufacture of welded components at the Hässleholm and Oskarström
units in Sweden. By implementing these actions, the company aims at
consolidating operations and strengthening its engineering
competences in future growth areas, particularly in Central Eastern
Europe and China. The plan is to close the above units in Sweden by
the end of this year.

In January, a decision was taken to centralise parts processing in
Ruukki Metals on the steel service centres in Raahe and Seinäjoki,
Finland. In this context, the closure of Ruukki Metals' steel service
centre in Tampere, Finland was completed during the second quarter.

Adjustment measures are also under way across the company as a result
of difficult market conditions. By the end of June, employer-employee
negotiations relating to actions to improve operational efficiency
and adjust operations had resulted in a workforce reduction of around
1,800 employees corporate-wide. Around 500 of these employees are in
Finland. Almost 300 of the people affected by workforce reductions in
Finland are covered by pension arrangements. At the end of June, a
total of some 4,800 employees, of which around 4,400 in Finland, are
subject to temporary lay-off measures. The duration and time of
lay-offs varies according to site. In addition, around 800 people in
various countries in Central Eastern Europe have gone over to working
a four-day week until further notice.

It is estimated that cost savings delivered by the Boost programme
and other adjustment measures under way will be around EUR 80 million
during 2009.


Personnel

The Group employed an average of 13,165 (14,986) persons during
January-June. At the end of June, the headcount was 12,855 (15,655),
which was allotted as follows: 6,699 in Finland, 1,152 in the other
Nordic countries, 2,427 in Central Eastern Europe, 2,223 in Russia
and other CIS countries, 81 in Western Europe and 273 in China.


Capital expenditure

Net cash flow from investing activities during January-June was -EUR
89 million (-97).

Capital expenditure on tangible and intangible assets totalled EUR 88
million (103), of which maintenance investments were EUR 35 million
(25). A total of EUR 7 million (6) was spent on acquisitions. Other
shares increased by EUR 2 million (0).

Cash inflows of EUR 9 million (11) from investing activities during
the report period were mostly generated by divestments of property,
plant and equipment.

A decision was made in April to modernise the two blast furnaces at
the Raahe Works during 2010 and 2011. It is planned to bring
modernisation of blast furnace 1 forward by three months so that work
begins in April 2010. The company plans to modernise blast furnace 2
during 2011. Blast furnace modernisations are essential maintenance
investments. Both blast furnaces will be shut down in turn for around
two months during the modernisation project. Start-up of the blast
furnaces after modernisation is expected to last between four and six
weeks.

In connection with blast furnace modernisation, Ruukki will switch
over to using only iron pellets instead of sinter as a raw material
in the iron-making process. The sinter plant currently in use will be
closed down by the end of 2011.

The investments in modernising the blast furnaces and changing the
feedstock base total around EUR 220 million, in addition to which
environmental investments of some EUR 60 million will be made.

Capital expenditure on tangible and intangible assets for 2009 is
estimated to remain below EUR 170 million.


Shares and share capital

During the first half of 2009, Rautaruukki Oyj shares (RTRKS) were
traded for a total of EUR 1,612 million (3,382) on NASDAQ OMX
Helsinki. The highest price quoted was EUR 17.45 in May and the
lowest was EUR 11.06 in January. The volume weighted average price
was EUR 14.10. The share closed at EUR 14.25 and the company had a
market capitalisation of EUR 1,999 million (4,075) at the end of the
report period on 30 June 2009.

The company's registered share capital at 30 June 2009 was EUR 238.5
million and there were 140,285,425 shares issued.

A total of 20,480 Rautaruukki Oyj shares were subscribed through
warrants exercised between 15 April and 23 May 2009 under the
personnel 2003 bond with warrants. The share capital was increased by
EUR 34,816 accordingly. The increase in share capital was entered in
the Trade Register on 18 June 2009. The subscription period through
warrants under the 2003 bond with warrants expired on 23 May 2009 and
the increase in share capital entered in the Trade Register in June
was the last under this bond. Warrants were exercised to subscribe a
total of 1,398,980 shares (99.9 per cent).

The Board of Directors has the authority to acquire a maximum of
12,000,000 of the company's own shares. The authority is valid for 18
months from the date of the resolution of the Annual General Meeting
held on 24 March 2009. During the report period, the Board of
Directors did not exercise its authority to acquire the company's own
shares.

In addition, the Board of Directors has the authority to decide on a
share issue, which includes the right to issue new shares or to
transfer treasury shares held by the company. The authority applies
to a maximum of 15,000,000 shares in total. The Board of Directors
has the right to disapply the pre-emption rights of existing
shareholders in a private placement. The authority also includes the
right to decide on a bonus issue. The authority is valid until the
close of the 2011 Annual General Meeting. During the report period,
the Board of Directors did not exercise its authority to issue
shares.

At the end of the report period, the Board of Directors had no valid
authority to issue options or other special rights providing
entitlement to shares.

At 30 June 2009, the company held 1,420,608 treasury shares, which
had a market value of EUR 20.2 million and an accountable par value
of EUR 6.1 million. Treasury shares account for a relative percentage
of 1.01 per cent of the total number of shares and votes.


Energy and the environment

In April, the company invested EUR 10 million in GreenStream Network
Plc's Climate Opportunity Fund, a vehicle purchasing carbon emissions
reductions. The emissions reductions generated can be used in
emissions trading in 2013-2020.

In April, Ruukki made a decision to modernise its two blast furnaces
at the Raahe Works during 2010 and 2011. In the same context, the
company will also make environmental investments of around EUR 60
million. Closure of the sinter plant and the environmental
investments to be actioned will significantly reduce dust, sulphur
dioxide and carbon dioxide emissions, and reduce energy consumption
at the works.

In June, the company published the environmental reviews for 2008 for
the Raahe and Hämeenlinna works. Published electronically, the
reviews supplement the printed environmental reports for 2007 and can
be viewed on the company's website.


Events taking place after 30 June 2009

Owing to weak demand in the shipbuilding industry, the company
announced in July that it was to reorganise operations at the Mo i
Rana plant in Norway. Adjustment to production will result in the
reduction of 137 jobs at the plant during autumn this year. In
future, the Mo i Rana plant will focus on the production of flange
profiles for windmill towers. Reorganisation of operations is
expected to result in non-recurring costs of around EUR 1.2 million,
which will be booked in the third quarter of 2009.


Risks and risk management

Risk management at Rautaruukki is guided by the operating principles
and process of corporate risk management set out in the risk
management policy approved by the company's Board of Directors. Risk
management is an integrated part of the company's management system.
The company has detailed the business risks and risk management in
the Annual Report 2008 and does not consider any material changes to
have taken place during the report period in the risks and factors of
uncertainty presented in the Annual Report 2008.


Business environment development

Of the countries where Ruukki has construction operations, it is
anticipated that the national economies of Poland and Russia will
recover faster than those, for example, of the Baltic states, Hungary
or Ukraine when the global economy returns to the growth track.
However, there is still a strong need for new and renovation
construction in all Eastern European countries. Other construction
needs created by major infrastructure projects partly support demand
for commercial and industrial construction in these countries.

Due to difficult market conditions, many engineering companies in
different customer industries are reviewing their manufacturing
strategies. Consequently, some companies will increase insourcing,
whereas others will increase outsourcing. This trend is expected to
increase demand for local assembly and manufacturing in the company's
units in Poland and Hungary and, in future, possibly also in Russia.
A weakening of the currencies of countries in these regions is partly
contributing to this change. On the other hand, however, this trend
poses challenges for the near-term growth of Ruukki's engineering
business, especially in Finland and the other Nordic countries.

The first international price agreements for 2009 on coal and iron
ore, the main raw materials used in steel production, were signed
during the spring and early summer. However, selling prices of steel
products fell sharply already during the first part of the year
partly in anticipation of a fall in the prices of raw materials.
These raw material price agreements are expected to support the price
development of steel products during the second half of the year as
the uncertainty concerning raw material costs fades. Lower stock
levels are also expected to contribute to price development.


Near-term outlook

There were no significant changes in the company's near-term outlook
during the second quarter. It still remains difficult to predict
market development and business visibility is noticeably shorter than
usual.

Even though construction activity is typically briskest during the
third quarter, lower than normal growth in seasonal demand is
expected for the current year. There are signs that residential
construction will pick up in Finland and the other Nordic countries
towards the end of the year. However, no growth in the level of
activity in commercial and industrial construction is anticipated
during the current year. Demand is not expected to recover until the
situation in the financial markets improves and customer confidence,
as well as a willingness and ability to invest, is restored.
Infrastructure construction is expected to pick up somewhat and it is
anticipated that public sector stimulus packages will foster demand
in the Nordic countries starting from towards the end of 2009.

There are some signs of a decline in stock levels in the supply chain
within the engineering industry. This is expected to support demand
within the company's engineering business towards the end of the
year. However, no real improvement is expected over the next few
months in the poor level in demand witnessed during the second
quarter in the manufacture of equipment in the lifting, handling and
transportation industry. Good demand from equipment manufacturers in
the energy industry is expected to continue even though uncertainty
in the financial markets might also affect new wind farm projects.
Market conditions in plate products and components in the
shipbuilding industry are weak and there are few new orders.

Demand for steel products varies according to customer. Even though
there are signs that de-stocking has ended in some customer segments,
no marked improvement in the overall picture of demand is expected
during the summer. Once de-stocking is completed, direct ex-works
deliveries of steel products are expected to increase to correspond
to the level of end-customer demand. The fall in the prices of raw
materials used in steel production will be reflected in full in the
company's cost structure during the second half of the year.

Restarting the idle blast furnace at the Raahe Works will increase
the steel production capacity utilisation rate and clearly improve
cost efficiency. This will be evidenced in the company's cost
structure during the second half of the current year.

The company expects cost savings through operational efficiency
improvement actions and adjustment measures to impact in full during
the second half of the year. Cost savings from the Boost programme
and other adjustment measures already under way are expected to be in
the region of EUR 80 million for the whole year. Operational
efficiency improvement actions and adjustment measures will continue
corporate-wide. The company's financial position is expected to
remain strong.

Based on efficiency improvement actions and adjustment measures under
way, lower costs of raw materials used in steel production and
improved cost efficiency in steel production, the company estimates
there will be a marked improvement in the result before taxes for the
second half of the year compared to the first half, but might remain
slightly negative.

This report is unaudited.

Helsinki, 17 July 2009

Rautaruukki Corporation

Board of Directors



DIVISIONS

Ruukki Construction


EUR million         Q1/08 Q2/08 Q3/08 Q4/08  2008 Q1/09 Q2/09
Net sales             225   285   309   248 1 067   132   145
Operating profit *     21    38    56    17   132   -13    -9
as % of net sales *     9    13    18     7    12   -10    -6
* Excluding non-recurring items.



Net sales

Ruukki Construction's net sales for the first half of the year were
EUR 278 million (509), down by 45 per cent year on year. The division
accounted for 29 per cent (25) of consolidated net sales. Second
quarter net sales were down year on year at EUR 145 million (285).

Net sales development was affected by continued weak demand
throughout the report period, with a particularly low level of
activity witnessed in commercial and industrial construction.
Customers' difficulties in arranging funding and increasing caution
in decision-making delayed the start of many construction projects in
a number of market areas and, in some countries in Central Eastern
Europe, Russia and Ukraine, projects were even discontinued. Publicly
funded projects, such as the construction of sports centres and
agricultural buildings, in Russia, and partly also in other market
areas, accounted for a much greater share of the division's net
sales. Construction in the energy industry, too, remained brisker
than in other industrial sectors. Compared to the first half of 2008,
net sales also decreased due to the weakening of a number of sales
currencies against the euro.

Infrastructure construction net sales for the first half of 2009 fell
less than net sales of commercial and industrial construction. Low
demand for piles used in building foundation construction
particularly contributed to weaker net sales performance.
Infrastructure construction accounted for 15 per cent (12) of the
division's net sales during the first half of the year.

Consistent with normal seasonal fluctuation, sales of residential
roofing products were brisker during the second quarter of the year
than during the first. Nevertheless, considerably weaker market
conditions than in earlier years meant that sales volumes of roofing
products during the first half of 2009 were down year on year.
Residential construction accounted for 15 per cent (11) of the
division's net sales during the first half of the year.


Operating profit

Ruukki Construction's negative operating profit was -EUR 22 million
(59) for the first half of the year and -EUR 9 million (38) for the
second quarter. Operating profit decreased especially as a result of
lower sales volumes and selling prices. Selling prices of
construction products fell during the first half of the year,
especially in Central Eastern Europe. However, the fall in prices
levelled off towards the end of the second quarter. Also, high costs,
which were still unable to be fully aligned to lower sales, weakened
profitability.

Also, the use of own steel produced at high material prices and the
use of high-cost external material in stock continued to impact on
profitability during the second quarter, too.

Actions to improve operational efficiency and adjust operations have
only partly impacted on the cost structure during the first half of
the year. Cost savings are expected to impact mainly during the
second half of the year.


Major orders

In April, the company announced the delivery and installation of the
steel frame and envelope structures for a new combined heat and power
(CHP) plant in Pärnu, Estonia. The delivery is a step forward in the
company's progress towards increasingly wider total deliveries in the
Baltics. Likewise in April, the company announced the delivery of
steel structures to extend the quay of the deep water harbour in the
Suursatama project in Kokkkola, Finland. The structures delivered for
the harbour project are worth EUR 1.4 million.

During the second quarter, the company designed, delivered and
installed the steel structures for three new ceramic tile production
facilities in Orel, Russia. The contract was worth around EUR 2
million.


Capital expenditure

Ruukki Construction has been implementing an investment programme to
increase production capacity in Russia and Eastern Europe since 2007.
The programme was largely completed by year-end 2008. However, the
sandwich panel line to be built in Ukraine is still incomplete and in
the light of market conditions, the installation and start-up of the
line is under review. Also the new panel plant investment under
construction at Obninsk in Russia has been discontinued until further
notice. The plant was originally planned to come on stream towards
the end of this year.

Construction of the new sandwich panel plant at Alajärvi, Finland is
progressing to plan and will be completed during the last quarter of
the year.


Improved operational efficiency

Under the corporate-wide operational excellence programme, Boost, the
division actioned a number of production arrangements between sites
during the first half of the year. Efficiency has been improved by
centralising production, which has resulted in the closure of
production sites in the Baltics (Latvia and Lithuania) and Central
Eastern Europe (Czech Republic). A number of actions to improve
efficiency are still under way at other sites, including Oborniki in
Poland and Obninsk in Russia. These projects are progressing to plan.

In March, the company decided to integrate production at its plants
in Kalajoki, Finland, where it has plants serving construction and
the engineering industry. In future, both plants will manufacture
components for the engineering industry. Employer-employee
negotiations in this context were completed in May. The negotiations
resulted in the transfer of 35 employees to Ruukki Engineering
division and 12 redundancies.


Other events

During the second quarter, the company received two major steel
construction awards. The Swedish Institute of Steel Construction
chose Swedbank Stadium in Malmö, Sweden as the Swedish steel
construction of the year. Ruukki was responsible for the design,
manufacture and installation of the steel structures for the stadium.
The stadium was completed in November 2008. In May, the Norwegian
Steel Association and the Norwegian Structural Steel Association
voted the Ypsilon pedestrian bridge delivered by Ruukki as the 2009
steel structure of the year in Norway. The company delivered the
steel structures for the bridge in Drammen, Norway and was also
responsible for the prefabrication and installation of the bridge
pylons and deck. The bridge was completed in March 2007 and has
previously received a Certificate of Nomination in the ECCS Awards
for Steel Bridges.

During the first half of the year, the division launched a new RD
drilled pile system for use in infrastructure construction. Advanced
jointing technology in particular now makes piling work considerably
more efficient. The new system has been launched in Finland, Norway
and Sweden and demand for piles has increased, with deliveries to
several projects already.

Decorrey, a new steel roof, was first launched on the Estonian market
in April and sales have got off to an excellent start. During the
second quarter, Decorrey was also launched in Poland, the Czech
Republic and Slovakia.


Ruukki Engineering


EUR million         Q1/08 Q2/08 Q3/08 Q4/08 2008 Q1/09 Q2/09
Net sales             188   205   184   187  765   125    75
Operating profit *     32    35    34    27  128     5    -2
as % of net sales *    17    17    19    14   17     4    -3
* Excluding non-recurring items.



Net sales

Ruukki Engineering's net sales for the first half of the year were
EUR 200 million (394), down by 49 per cent year on year. The division
accounted for 21 per cent (20) of consolidated net sales. Second
quarter net sales were down sharply year on year at EUR 75 million
(205).

Deliveries to equipment manufacturers in the energy industry, both in
wind and diesel power plants, continued at a good level. However,
weak demand from customers, especially in equipment manufacture in
the lifting, handling and transportation industry, reduced order
intake. Lower delivery volumes decreased Ruukki Engineering's net
sales. Net sales fell in all product groups in this segment, except
for telescopic booms for mobile cranes, sales of which during the
report period remained unchanged year on year.

Similarly, de-stocking throughout the supply chain decreased demand
for Ruukki Engineering's products and services. There were few
deliveries also to shipbuilding and offshore customers.

The division's business in China continued to make positive progress
and grew year on year.

Equipment manufacturers in the lifting, handling and transportation
industry accounted for 36 per cent (45) and equipment manufacturers
in the energy industry for 35 per cent (19) of the division's net
sales during the first half of the year.


Operating profit

Ruukki Engineering's reported operating profit slipped to -EUR 2
million (66) for the first half of the year and operating profit
excluding non-recurring items to EUR 3 million. The division reported
a negative operating profit of -EUR 7 million (35) for the second
quarter and an operating profit of -EUR 2 million excluding
non-recurring items.

Ruukki Engineering's operating profit was weakened by lower sales
volumes, lower sales prices, especially for plate products and parts,
as well as the use in these products of steel produced at high raw
material prices. The division took a non-recurring charge of EUR 5
million on the planned closure of the units in Hässleholm and
Oskarström in Sweden. This charge was booked in the second quarter.


Capital expenditure and business development

Ruukki Engineering has systematically invested in new manufacturing
technology to improve operational efficiency, quality and delivery
accuracy. This technology enables streamlined, automated production
lines for the manufacture of components for delivery to equipment
manufacturers in the energy industry and lifting, handling and
transportation industry.

Work continued during the report period on the installation and
testing of two robot cells at the cabin assembly unit in Kurikka,
Finland. Automation of welding operations at the Peräseinäjoki site
in Finland also continued to plan and will be completed during the
course of 2009.

A project to improve machining operations at the Sepänkylä unit in
Finland was completed and the new equipment came on stream during the
second quarter. Progress was made to plan with the machining project
in Jaszbereny, Hungary.

The first quarter saw the start of process development work at the Mo
i Rana unit in Norway, which is focusing on energy-saving process
automation. Work is at the planning stage and the aim is to complete
the project during 2009.

In Shanghai, China, operations expanded into new premises during the
first quarter of 2009. The new production lines serve the company's
customers in the lifting, handling and transportation equipment
industry and in the energy industry. The first cabins to roll off the
new production lines were delivered during the second quarter. Also
during the second quarter, the company reserved the opportunity to
further expand its business in China and reached an agreement on an
option to lease a plot adjacent to the plant completed during the
first half of the year.


Improved operational efficiency

The division improved operational efficiency during the first quarter
by relocating production lines and by adjusting production. In March,
the company announced it was to further improve operational
efficiency by integrating production at its two plants in Kalajoki,
Finland. One of the Kalajoki plants earlier served the company's
construction customers, but in future both plants will produce
components for the engineering industry. Operations will be
centralised so that one of the plants focuses on the light and the
other on the heavy engineering industry.

In May, the company announced it was to discontinue the manufacturing
of welded components at the Hässleholm and Oskarstöm units in Sweden.
These actions are intended to consolidate the company's operations
and to strengthen its engineering competences in future growth areas,
particularly in Central Eastern Europe and China. The plan is to
close the above Swedish units by the end of the year. Closure is
expected to result in the loss of 106 jobs at Hässleholm and 36 jobs
at Oskarström.

In July, after the report period, the company announced it was to
reorganise operations at its plant in Mo i Rana, Norway due to weak
demand in the shipping industry. Adjustment to production will result
in the reduction of 137 jobs at the plant. These reductions will take
place during the autumn. In future, the Mo i Rana plant will focus on
the production of flange profiles for windmill towers.


Ruukki Metals


EUR million        Q1/08   Q2/08   Q3/08   Q4/08   2008  Q1/09  Q2/09
Net sales            511     571     503     412  1 997    249    218
Operating profit
*                     96     106     112      36    350   -102    -97
as % of net
sales *               19      19      22       9     18    -41    -44
All figures are comparable and exclude Carl Froh GmbH, which was
divested.
* Excluding non-recurring items.



Net sales

Ruukki Metals' net sales for the first half of the year were EUR 467
million (EUR 1,105 million reported and EUR 1,082 million
comparable). The division accounted for 49 per cent (55) of
consolidated net sales. Second quarter net sales were EUR 218 million
(EUR 580 million reported and EUR 571 million comparable).

Weak demand for steel products continued almost throughout the first
half of the year, although picked up somewhat towards the end of the
second quarter. Stock levels were still being unwound in the market
during the second quarter, which partly affected the number of
deliveries. A low level of activity in the lifting, handling and
transportation equipment industry decreased sales of special steel
products in particular. Likewise sales of stainless steel and
aluminium, sold as trading products, were down year on year.

Special steel products accounted for 19 per cent (27) of Ruukki
Metals' net sales during the report period. Net sales of stainless
steel and aluminium totalled EUR 54 million (133).

Prices of steel products continued to fall during the second quarter.
However, the first international price agreements signed during the
spring and early summer on the prices of the main raw materials -
coal and iron ore - used in steel production to some extent levelled
off the falling prices of steel products as uncertainty about raw
material costs gradually faded. Lower stocks also partly supported
price development.


Operating profit

Ruukki Metals' negative operating profit was -EUR 199 million (EUR
197 million reported and EUR 202 million comparable) for the first
half of the year and -EUR 97 million (EUR 100 million reported and
EUR 106 million comparable) for the second quarter. The division's
negative operating profit was mainly due to the continued sluggish
demand for steel products. In addition, poor price development and
the unwinding of stocks produced at high raw material prices weakened
profitability.

The low steel production capacity utilisation rate increased the
fixed costs per unit of steel produced. Restarting the idle blast
furnace at the Raahe Works gradually increased steel production
capacity utilisation rates since the first half of May, although this
still did not yet significantly reduce the cost per unit of steel
produced. Low production capacity utilisation had an impact of around
-EUR 70 million on costs during the second quarter (Q1/2009: -EUR 90
million).

Operating profit on stainless steel and aluminium was slightly
negative during the first half of the year. The costs of the strike
in June at the strip mill at the Raahe Works in Finland and stock
writedowns weakened profitability by around EUR 11 million.


Steel production


1000 tonnes      Q1/08 Q2/08 Q3/08 Q4/08  2008 Q1/09 Q2/09
Steel production   672   680   703   531 2 585   269   392



The company's steel production during the first half of the year was
661 thousand tonnes (1,352).

The steel production capacity utilisation rate remained low almost
throughout the report period. The blast furnace which had been idle
since December 2008 at the Raahe Works was restarted during early May
and reached its target capacity utilisation rate of around 80 per
cent in mid-June. Start-up of the blast furnace went according to
plan. The blast furnace was restarted to build up reserve stocks to
safeguard uninterrupted customer deliveries during disruption to
production for the period of downtime in 2010 whilst modernisation is
being carried out.

In June, there was a strike lasting at number of days at the strip
mill at the Raahe Works. The strike is being heard by the Labour
Court.


Capital expenditure

In April, Ruukki made a decision to modernise its two blast furnaces
at the Raahe Works during 2010 and 2011. In the same context, the
company will also make environmental investments. It is planned to
start modernisation of blast furnace 1 in April 2010. The company
plans to modernise blast furnace 2 during 2011. Blast furnace
modernisation is an essential maintenance investment.

In connection with blast furnace modernisation, the company will
switch over to using only iron pellets instead of sinter as a raw
material in the iron-making process. The sinter plant currently in
use will be closed down by the end of 2011.

The investments in modernising the blast furnaces and changing the
feedstock base in 2009-2012 total around EUR 220 million, in addition
to which environmental investments of some EUR 60 million will be
made.


Improved operational efficiency

In January, a decision was made to centralise parts processing on
Ruukki Metals' steel service centres in Raahe and Seinäjoki, Finland.
In the same context, the steel service centre in Tampere was closed
during the second quarter.

The division has held employer-employee negotiations concerning
temporary lay-offs and workforce reductions. By the end of June,
negotiations had resulted in a workforce reduction of around 500
persons and lay-offs affecting a total of around 3,500 employees. The
duration and time of lay-offs varies according to site.


Other events

Lost time accident frequency during the first half of the year was 10
(14) per million hours worked.

In April, the company expanded its offering of high-strength steels
with the launch of Optim 1500 QC, the world's strongest hot-rolled
structural steel. This ultra high-strength steel is an ideal
structural material for earthmoving machinery, for example. Optim
1500 QC steel is produced using the company's own direct quenching
process.

In April, the Ministry for Economic Development and Trade of the
Russian Federation extended the investigation time into the
anti-dumping of colour-coated products to 21 July 2009. If
introduced, import duties would apply to exports of colour-coated
products to Russia from the date the decision enters into force.
Ruukki manufactures and exports around EUR 30 million of these
products from Finland to Russia each year.

TABLES

This interim report has been prepared in accordance with IAS 34 and,
with the exception of the following new and amended standards
effective from 1 January 2009, is in conformity with the accounting
policies published in the 2008 financial statements.

IAS 1 Presentation of Financial Statements. The revised standard aims
to improve users' ability to analyse and compare the information
presented in the financial statements by separating changes in equity
of an entity arising from transactions with owners from other changes
in equity.

IFRS 8 Operating Segments. This new standard requires the company to
apply the "management approach" to reporting the financial
performance of its operating segments. This means that the
information disclosed must be based on the information management
uses internally to evaluate segment performance. IFRS-standards are
applied in the Group's management reporting and assessment of
performance and decisions about resource allocation to segments is
based on their respective operating profits. Adoption of the standard
has not impacted on the Group's segment structure.

IAS 23 Borrowing Costs. The amended standard requires an entity to
capitalise borrowing costs directly attributable to the acquisition,
construction or production of a qualifying asset as part of the cost
of that asset. The option of immediately recognising such borrowing
costs as an expense has been removed. The Group applies
capitalisation rate to calculate the interest to be capitalised. The
amended standard has had no material impact on the Group.

IFRS 2 Share-based payments amendments to the standard - Vesting
Conditions and Cancellations. The amendments clarify the accounting
treatment of vesting conditions and provide that cancellations by the
company or other parties receive similar accounting treatment.

Additionally, the Group has changed the presentation of the income
statement from the "nature of expense" method to the "function of
expense" method. The comparable figures have been restated
accordingly.

Individual figures and totals appearing in the tables have been
rounded to the nearest full million of euros.


SUMMARY CONSOLIDATED INCOME STATEMENT
EUR million                       Q1-Q2/09 Q1-Q2/08 Q2/09 Q2/08  2008
Net sales                              944    2 008   438 1 069 3 851
Cost of sales                        1 046    1 533   492   814 2 980
Gross profit                          -101      475   -54   255   872

Sales and marketing costs               58       76    29    39   148
Administrative expenses                 79       94    38    49   177
Other operating income                  10       13     3     8    31
Other operating expenses                 1       10    -1    10    10
Operating profit                      -230      309  -117   166   568

Finance income and expense             -19       -3   -10     1   -23
Share of results of associates           0        2     0     1     3
Result before taxes                   -249      308  -127   167   548
Taxes                                   65      -78    33   -45  -142
Result for the period                 -184      229   -94   123   406

Attributable to:
Equity shareholders of the parent     -184      229   -94   123   406
Minority interest                        0        0     0     0    -1

Diluted earnings per share, EUR      -1.33     1.65 -0.68  0.89  2.93
Basic earnings per share, EUR        -1.33     1.65 -0.68  0.89  2.93
Operating profit as % of net
sales                                -24.3     15.4 -26.7  15.5  14.7




STATEMENT OF COMPREHENSIVE INCOME
EUR million                        Q1-Q2/09 Q1-Q2/08 Q2/09 Q2/08 2008
Result for the period                  -184      229   -94   123  406
Other comprehensive income:
Cash flow hedges                         21       -4    20     8  -62
Translation differences                  -4        1    17     4  -54
Actuarial gains and losses                0      -47     0     0  -62
Taxes on other comprehensive
income                                   -5       13    -6    -2   32
Other comprehensive income after
taxes                                    11      -36    32    10 -145
Total comprehensive income             -174      193   -62   133  261

Attributable to:
Equity shareholders of the parent      -174      193   -62   133  261
Minority interest                         0        0     0     0   -1




SUMMARY CONSOLIDATED BALANCE SHEET
                                             30 Jun 30 Jun 31 Dec
EUR million                                    2009   2008   2008
ASSETS
Non-current assets                            1 470  1 427  1 442
Current assets
  Inventories                                   567    669    750
  Trade and other receivables                   349    705    536
  Cash and cash equivalents                     102    103    254
Total assets                                  2 488  2 903  2 983

EQUITY AND LIABILITIES
Equity
  Attributable to shareholders of the parent  1 587  1 874  1 948
  Minority interest                               2      3      2
Non-current liabilities
  Interest-bearing liabilities                  322    134    276
  Non-interest-bearing liabilities              102    175    158
Current liabilities
  Interest-bearing liabilities                  144     77    133
  Trade payables and other liabilities          332    640    466
Total equity and liabilities                  2 488  2 903  2 983




SUMMARY CASH FLOW STATEMENT
EUR million                                   Q1-Q2/09 Q1-Q2/08 2008
Result for the period                             -184      229  406
Adjustments                                         70      149  250
Cash flow before change in working capital        -114      378  656
Change in working capital                          215      -14 -110
Financing items and taxes                          -18      -75 -164
Cash flow from operating activities                 82      289  382
Cash inflow from investing activities                9       11   25
Cash outflow from investing activities             -97     -109 -238
Total cash flow from investing activities          -89      -97 -213
Cash flow before financing activities               -6      192  169
Dividends paid                                    -188     -277 -277
Change in interest-bearing liabilities              54       -8  193
Other net cash flow from financing activities      -11        1   -4
Translation differences                             -2        0  -11
Change in cash and cash equivalents               -153      -93   70




KEY FIGURES
                                     Q1-Q2/09    Q1-Q2/08        2008
Net sales, EUR m                          944       2 008       3 851
Operating profit, EUR m                  -230         309         568
as % of net sales                       -24.3        15.4        14.7
Result before taxes, EUR m               -249         308         548
as % on net sales                       -26.4        15.3        14.2
Result for the period, EUR m             -184         229         406
as % of net sales                       -19.5        11.4        10.5
Return on capital employed
(rolling 12 mths), %                      1.9        28.6        25.6
Return on equity, %                      -0.5        23.3        20.7
Equity ratio, %                          64.3        66.1        65.9
Gearing ratio, %                         22.9         5.8         7.9
Net interest-bearing liabilities,
EUR m                                     364         109         155
Equity per share, EUR                   11.43       13.51       14.04
Personnel, average                     13 165      14 986      14 953
Number of shares                  140 285 425 140 215 328 140 255 479
 - excluding treasury shares      138 864 817 138 748 391 138 788 542
 - diluted, average               138 826 947 138 795 862 138 773 118




STATEMENT OF CHANGES IN
EQUITY
                Equity attributable to shareholders of
                                parent
                               Fair
                              value
                                and  Trans-           Re-   Min-
                              other  lation  Trea- tained  ority
               Share   Share    re-   diff-   sury  earn- inter-  Total
EUR million  capital premium serves erences shares   ings   ests equity
EQUITY 1 Jan
2008             238     220      9      -6     -6  1 504      3  1 963
Share issue        0                                                  0
Dividend
distribution                                         -277          -277
Share based
payments                          0              0      0             0
Total
compre-
hensive
income                           -3       2      0    193      0    191
EQUITY 30
June
2008             238     220      6      -4     -6  1 419      3  1 877

EQUITY 1 Jan
2009             238     220      0     -36     -6  1 532      2  1 950
Share issue        0                                                  0
Dividend
distribution                                         -188          -188
Share based
payments                          0              0      0             0
Total
compre-
hensive
income                                   -4          -170      0   -174
EQUITY 30
June
2009             238     220      1     -40     -6  1 175      2  1 589




NET SALES BY REGION
As % of net sales                          Q1-Q2/09 Q1-Q2/08 2008
Finland                                          32       32   31
Other Nordic countries                           33       33   31
Central Eastern Europe, Russia and Ukraine       17       18   20
Rest of Europe                                   14       14   15
Other countries                                   4        3    4




CONTINGENT LIABILITIES
EUR million                          Q1-Q2/09 Q1-Q2/08 2008
Mortgaged real estate                      73       24   24
Pledged assets                              0        6    5
Other guarantees given                     37       46   45
Collateral given on behalf of others        3        6    2
Rental liabilities                        116      143  132




VALUES OF DERIVATIVE
CONTRACTS
CASH FLOW HEDGES QUALIFYING FOR HEDGE ACCOUNTING
                                30 Jun    30 Jun     30 Jun    30 Jun
                                  2009      2009       2008      2008
                               Nominal      Fair    Nominal      Fair
EUR million                     amount     value     amount     value
Zinc derivatives
  Forward contracts, tonnes     32 500       -14     42 000       -16
Electricity derivatives
  Forward contracts, GWh         1 844       -15      1 054        24

The unrealised movements in the fair value of cash flow hedges are
recognised in equity to the extent the hedge is effective. Other
movements in fair value are recorded through profit and loss.

DERIVATIVES NOT QUALIFYING FOR HEDGE ACCOUNTING
                                30 Jun    30 Jun     30 Jun    30 Jun
                                  2009      2009       2008      2008
                               Nominal      Fair    Nominal      Fair
EUR million                     amount     value     amount     value
Zinc derivatives
Forward contracts, tonnes          500         0
Foreign currency
derivatives
  Forward contracts                487       -10        584        -7
  Options
    Bought                          90        -1        265        -3
    Sold                            90         0        265        -8




CHANGES IN PROPERTY, PLANT AND EQUIPMENT
EUR million                              Q1-Q2/09 Q1-Q2/08  2008
Carrying value at start of period           1 124    1 076 1 076
Additions                                      90       98   215
Additions through acquisitions                  4        4     8
Disposals                                      -6       -2    -8
Disposals through divestments                   0      -22   -22
Depreciation and impairment                   -61      -61  -119
Translation differences                        -7        4   -26
Carrying value at the end of period         1 144    1 098 1 124




TRANSACTIONS WITH RELATED PARTIES
EUR million                                 Q1-Q2/09 Q1-Q2/08   2008
Sales to associates                               11       11     30
Purchases from associates                          2        4      6
Transactions with Pension Foundation               3        3      6

                                              30 Jun   30 Jun 31 Dec
                                                2009     2008   2008
Trade and other receivables from associates        3        7      5
Trade and other payables to associates             0        0      0




INVESTMENT COMMITMENTS *
                                           After 30 After 30 After 31
EUR million                                Jun 2009 Jun 2008 Dec 2008
Maintenance investments                         238      141      102
Development investment and investments in
special products                                111      183      113
Total                                           349      325      215
* Investment commitments include the estimated costs of projects that
have been given the go ahead.




INFORMATION ON BUSINESS
COMBINATIONS
                                                   Carrying values of
EUR million                        Fair values     acquired companies
Assets and liabilities of
acquired companies
Non-current assets                           8                      2
Current assets
  Inventories                                1                      1
  Trade and other
receivables                                  1                      1
  Cash and cash equivalents                  4                      4
Total assets                                14                      8
Non-current liabilities
  Interest-bearing                           0                      0
  Other                                      2                      0
Current liabilities
  Interest-bearing                           0                      0
  Other                                      3                      3
Total liabilities                            5                      3

Net assets                                   9                      5

Acquisition cost                            12
- including conditional
purchase price                               0
Goodwill                                     3

Acquisition cost paid in
cash                                        10
Cash and cash equivalents of
acquired company                             4
Impact on cash flow                          7
The figures above include information about the acquisition of
Skalles Eiendomsselskap AS. Rautaruukki acquired the entire share
capital of the Norwegian steel frame company Skalles Eiendomsselskap
AS from its private owners in February 2009. The acquisition
strengthens the Group's market position in the Nordic countries and
particularly in Norwegian steel construction. Skalles' business
complements the Group's customer base and product offering. Skalles'
total deliveries include the design, manufacture and installation of
steel structures. The company has some 50 employees and its net sales
for 2008 were approximately EUR 16 million. Skalles is located in
Fredrikstad, Norway. The acquisition calculation is provisional in
accordance with IFRS 3.




SEGMENT INFORMATION
EUR million                       Q1-Q2/09    Q1-Q2/08        2008
External net sales
  Ruukki Construction                  278         509       1 067
  Ruukki Engineering                   200         394         765
  Ruukki Metals                        467       1 105       2 019
  Corporate management                   0           0           0
Consolidated net sales                 944       2 008       3 851

Operating profit
  Ruukki Construction                  -22          59         128
  Ruukki Engineering                    -2          66         126
  Ruukki Metals                       -199         197         338
  Corporate management                  -7         -14         -25
Consolidated operating profit         -230         309         568

Finance income and expense             -19          -3         -23
Share of results of associates           0           2           3
Result before taxes                   -249         308         548
Taxes                                   65         -78        -142
Result for the period                 -184         229         406

EUR million                    30 Jun 2009 30 Jun 2008 31 Dec 2008
Segment assets
  Ruukki Construction                  769         835         761
  Ruukki Engineering                   353         408         411
  Ruukki Metals                      1 008       1 265       1 247
  Corporate management                  40          36          36
  Undistributed assets                 318         359         527
Total assets                         2 488       2 903       2 983




QUARTERLY SEGMENT INFORMATION, COMPARABLE, EXCLUDING NON-RECURRING
ITEMS
EUR million                 Q1/08 Q2/08 Q3/08 Q4/08  2008 Q1/09 Q2/09
External net sales
  Ruukki Construction         225   285   309   248 1 067   132   145
  Ruukki Engineering          188   205   184   187   765   125    75
  Ruukki Metals               511   571   503   412 1 997   249   218
  Corporate management          1    -1     0     0     0     0     0
Consolidated net sales        925 1 060   996   847 3 829   506   438

Operating profit
  Ruukki Construction          21    38    56    17   132   -13    -9
  Ruukki Engineering           32    35    34    27   128     5    -2
  Ruukki Metals                96   106   112    36   350  -102   -97
  Corporate management         -7    -7    -5    -6   -25    -3    -4
Consolidated operating
profit                        141   172   197    74   584  -113  -112

Finance income and expense     -4     1    -2   -18   -23    -9   -10
Share of results of
associates                      1     1     1     0     3     0     0
Result before taxes           139   174   195    56   564  -122  -123
Taxes                         -34   -45   -56    -7  -142    32    33
Result for the period         105   129   139    49   422   -90   -89



Formulas for the calculation of key indicators:


Return on capital    result before taxes + finance expense
employed, %          (rolling 12 months)
                   = ----------------------------------          x100
                     total equity + interest-bearing financial
                     liabilities (average at beginning and end
                     of period)

Return on equity,    result before taxes - taxes (rolling 12
%                    months)
                   = ------------------------------------        x100
                     total equity (average at beginning and end
                     of period)

Equity ratio, %      total equity
                   = --------------------------------------      x100
                     balance sheet total - advances received

Gearing ratio, %     net interest-bearing financial liabilities
                   = ---------------------------------------     x100
                     total equity

Net                =
interest-bearing     interest-bearing financial liabilities -
financial            interest-bearing financial assets and other
liabilities          cash and cash equivalents

Earnings per share   profit or loss attributable to equity
(EPS)                holders of the parent company
                   = ----------------------------------------
                     weighted average number of shares
                     outstanding during the period

Earnings per share   profit or loss attributable to equity
(EPS), diluted       holders of the parent
                   = --------------------------------------
                     weighted average diluted number of shares
                     outstanding during the period

Equity per share     equity attributable to equity holders of
                     the parent company
                   = ----------------------------------------
                     basic number of shares at the balance sheet
                     date

Volume weighted      total EUR trading of shares
average price      = ----------------------------------------
                     total number of shares traded

Market             = basic number of shares at the end of the
capitalisation       period x closing price at the end of the
                     period


Personnel, average = average number of personnel at the end of
                     each month during the period


This announcement was originally distributed by Hugin. The issuer is 
solely responsible for the content of this announcement.