Rautaruukki cuts annual profit outlook

CEO Sakari Tamminen of Rautaruukki (OMX: RTRKS) now fears prolonged economic crisis in Europe and says uncertainty has increased world over. Comparable net sales of 740 million, comparable operating profit of 8 million and comparable EBIT of 0 and reported numbers of 742, -5 and -13 million achieved during Q2 2012 respectively were very disappointing. Operating cash flow turned negative. Orders received were likely the brightest spot in the report

Steel customers have adjusted their order behaviour and Rautaruukki cuts its annual profit outlook behind lower estimates from Nordic countries which are still vital for the group. Net sales are still estimated to grow by around 5 per cent but operating profit is estimated to be level (grow) with last year. Some investors have even been saying that the steel maker should have warned earlier. First quarter was already very weak but the company was betting on a large turnaround. Efficiency measures such as the closure of disastrous engineering operations in Shanghai and other unit-specific actions are under way.