“Our strong performance continued in the second quarter – we delivered another record-level adjusted EBITDA of EUR 547 million, despite significant cost inflation and geopolitical turmoil. Our stainless steel deliveries declined, but realized prices for stainless steel continued to strengthen and support our profitability.
The past months have been eventful for Outokumpu. To mention a few of the key events of the second quarter, we launched the second phase of our strategy, introduced emission-minimized stainless steel product line Circle Green and announced our aim to achieve carbon neutrality at our Kemi chrome mine by 2025. In July, we announced that we will divest the majority of Long Products business area. This divestment represents a successful closing of the turnaround program, which was started two years ago.
At the end of the second quarter, our net debt totaled only 289 million. This is a great achievement, and I am proud that we have achieved the targets of the first phase of the strategy to deleverage the company and entered the second phase ahead of time. The aim of the second phase is to strengthen the core. We will be focusing on three key priorities: sustainability, growth from productivity and customer-focused steering.
In addition, new financial targets were launched: we aim to improve our EBITDA run-rate level by another EUR 200 million and keep our net debt to EBITDA ratio below 1.0 in a normal market environment. Our teams have done great work with the execution of the first phase, and I have full trust in that going forward.
In the first half of 2022, our adjusted EBITDA reached EUR 923 million, which is the best half-year result ever. Through diligent strategy execution, we have managed to strengthen the company significantly. Outokumpu is now more resilient to withstand also more challenging economic environments.
The market environment has been exceptionally favorable, but we have now started to see softening especially on the commodity business. Upcoming growth is expected to be generated from pro grades business looking for global expansion.
In the first half of 2022, Asian imports into Europe have increased and distributors’ inventory levels have continued to grow, which has had a negative impact on demand. Also, global cost inflation has started to impact Outokumpu, and we are doing our utmost to mitigate the negative impacts on our profitability.
In Europe, the war in Ukraine has led to an energy crisis with increased energy prices and uncertain availability for next winter. Yet, the realized impacts of the uncertain situation on stainless steel demand or economic growth are difficult to estimate.
We are living in exceptionally uncertain times both politically and economically. Outokumpu is financially stronger than ever and resilient to withstand changing circumstances.”
Updated on August 4, 2022.