Report for the first quarter of 1999

4/23/1999 7:43 AM EST

Falling steel prices result in weakened profit
Today, SSAB presented its report for the first quarter. Profit fell by SEK 569
million to SEK 108 (677) million.

- Steel prices have continued to fall during the first quarter, says CEO,
Torsten Sandin, in a comment to the results. Prices have now been under
pressure during three quarters. Following a fall in prices of 12% during the
quarter, prices are now nearly 20% lower than at the end of the first half of
last year.

- This fall in prices has, naturally, had a serious effect on our profit,
Torsten Sandin continues. On an annual basis, a fall of 20% in prices affects
profit by approximately SEK 2 billion.

- The balance on the market has, however, improved due to a continued limited
steel production in the Western Europe and reduced imports. The price
structure is fragmented with respect to the second quarter. It has been
possible to carry out certain limited price increases in respect of hot-rolled
sheet, but it has also been necessary to accept limited price reductions in
respect of other products on some markets.

- The positive aspects are that we are now witnessing the effect on our costs
of measures which we have taken, and that we have been able to increase
deliveries in the steel operations to a normal level after the decline we
experienced during the final quarter of last year.

- Processing costs are SEK 100 million lower than during the preceding
quarter. In addition, we have managed to achieve significant price reductions
for iron ore and coal, our two most important raw materials.

- We have now largely completed our three major investment programmes in the
steel operations and in SSAB HardTech. We thus possess the technical
prerequisites for continued growth within our niche products, high strength
sheet and quenched steels within the plate sector. It is now up to us to
exploit these market possibilities, at the same time as we continue to focus
in our internal work on costs and tied-up capital, concludes Torsten Sandin.




Falling prices resulted in a decline in profit after financial items of SEK
569 million to SEK 108 (677) million.
Processing costs were 7% lower than during the preceding quarter.
Reduced working capital and lower capital expenditures resulted in the cash
flow improving somewhat to SEK 253 (244) million.

Consolideted profit and loss account (not audited)

1998 1999 1998 April
98-
SEK millions Jan- Jan- Full March
March March year 99
Sales 4,929 4,25617,83 17,162
5
Cost of goods sold -3,900 -3,711 - -
14,79 14,609
8
Gross profit 1,029 5453,037 2,553
Selling and administrative -417 -411 --1,721
expenses 1,727
Other net operating revenues -5 -14 -3 -12
and expenses
Affiliated companies 18 -1 48 29
Operating profit 625 1191,355 849
Financial items 52 -11 69 6

Profit after financial items 677 1081,424 855
Tax -187 -34 -427 -274
Minority shares -9 -3 -15 -9
Profit after tax 481 71 982 572

Return on capital employed - - 11 7
before tax (%)
Return on equity after tax (%) - - 8 6
Earnings per share (SEK) 3.80 0.60 8.20 4.90
Equity per share (SEK) 103.90 89.2088.70 89.20
Equity ratio (%) 71 60 58 60
Number of shares at end of 128.00 112.11112.1 112.11
period (million) 1