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Investing.com -- Outokumpu Oyj reported an adjusted EBITDA of €49m for the first quarter of 2025, surpassing the Value-Added (VA) consensus estimate of €44m by 11%. This marks a significant improvement from the €3m loss reported in the fourth quarter of 2024. Despite the positive earnings report, shares of the company fell by 4.7%.
The improvement in earnings was primarily driven by a seasonal increase in stainless steel deliveries, which rose by 11% in the European Union and by 13% in the Americas, quarter-on-quarter. However, these gains were partly offset by a €15m impact from a one-week strike and ongoing pricing pressure, particularly in Europe. Additionally, low consumer confidence in the U.S. also had an impact on the company’s performance.
The company’s Ferrochrome division had a strong quarter, delivering its best performance since 2022.
In terms of cost-saving measures, Outokumpu achieved €11m in savings during the first quarter. The company is on track to reach its goal of €50m in savings for the year 2025. Additionally, a €26m improvement in EBITDA run rate, bringing the cumulative total to €313m, keeps the company on pace to hit its target of €350m by the end of 2025.
The company’s negative free cash flow (FCF) of -€62m for the quarter was impacted by seasonal working capital outflows of €16m. Capital expenditures (Capex) of €52m for the quarter align with the company’s guidance. The company has cut its full-year 2025 Capex forecast from approximately €200m to €160m.
Looking ahead to the second quarter of 2025, Outokumpu expects shipments to increase by 0-10% quarter-on-quarter. However, price pressure is anticipated to continue, and some gains in raw materials are forecasted. Overall, the company expects its EBITDA for the second quarter to be similar to or higher than the first quarter.
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