Comments on the report

Second quarter

The Group’s consolidated net sales for the period increased by 1 percent compared to last year and amounted to SEK 1,056 M (1,045). The increase is explained by positive price and mix effects of 3 percent, while tonnage decreased by 2 percent.

Market activity in the Nordic steel market improved gradually during the quarter from continuously low levels. Industrial market conditions strengthened in June, with increased order intake, production, and order backlogs, while the construction market continued to develop weakly. Steel prices increased during the quarter as a result of CBAM, tighter trade protection measures, and higher cost levels. At the same time, continued high import pressure and good material availability limited price increases in the distribution segment.

Geopolitical uncertainty remained throughout the quarter, partly due to developments in the Middle East. Although the impact on demand was limited, these developments contributed to increased uncertainty in the energy, raw materials, and transportation markets.

Tonnage delivered to the manufacturing industry increased by 1 percent, while deliveries to the construction segment decreased by 6 percent. In Finland, tonnage was unchanged, while tonnage in the Swedish operations declined by 2 percent, primarily attributable to the construction segment. Activity increased among several major OEM customers, while demand within the construction segment and parts of the subcontractor supply chain remained weak.

The combination of higher steel prices, strengthened gross margin, and improved operational efficiency in Finland led to gross profit increasing to SEK 153 M (111) corresponding to a gross margin of 14.5 percent (10.7).

The operating result increased to SEK 20 M (-492) and the operating margin amounted to 1.9 percent (-47.1). Adjusted for inventory gains of SEK 12 M (7) and items affecting comparability of SEK 0 M (-463), the underlying operating result increased to SEK 8 M (-36), and the underlying operating margin amounted to 0.8 percent (-3.4).

First six months

During the first six months, the Group’s net sales decreased by 3 percent compared to last year and amounted to SEK 2,078 M (2,150). The decline is explained by a negative tonnage development of 4 percent, negative currency effects of 1 percent, and positive price and mix effects of 2 percent. The decline in tonnage is attributable to the Swedish operations, primarily the construction segment.

Despite a continued challenging market environment, profitability improved during the period through enhanced margins, higher steel prices, and gradually improved operational efficiency, particularly in Finland.

Gross profit increased to SEK 286 M (226) and gross margin was strenghtened to 13.8 percent (10.5).

The operating result increased to SEK 28 M (-504) corresponding to an operating margin of 1.4 percent (-23.4). Adjusted for inventory gains of SEK 22 M (-3) and items affecting comparability of SEK 0 M (-463), the underlying operating result increased to SEK 6 M (-38). The underlying operating margin for the period amounted to 0.3 percent (-1.8).