Finnish stainless steel maker Outokumpu reported a plunge in third quarter adjusted core profit of more than 50 percent on Thursday hit by a fall in ferrochrome production.

Its underlying earnings before interest, taxes, depreciation and amortization of 56 million euros ($66.1 million) was well below the 98.1 million expected by analysts in a Reuters poll.

Profitability was hurt by raw material-related inventory and metal derivative losses of 41 million euros and third-party supplier production issues in the Americas, the company said.

Revenue rose by about 5 percent to 1.48 billion euros, boosted by high deliveries, but also felt short of analysts’ expectations.

Jefferies, which has a “hold” rating on the stock, believes that regardless of the raw materials-related inventory and hedging losses the “results still disappoint more cautious buy-side expectations”.

Outokumpu said it expects to improve profitability in the fourth quarter.

Shares in Outokumpu shares were down 9.8 percent to 8.16 euros as of 1105 GMT.

 

Source:reuters.com

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