Sharp rise in sales of core niche products

7/19/2004 6:52 AM EST

SSAB today presented its results for the first half of 2004. Profit
after financial items increased by SEK 905 million to SEK 1,685 (780)
million.

- The result for the first half of the year is the best since 1995 and
the second best ever. The strong result also entails that cash flow
increased significantly and amounted to SEK 900 (37) million, notes CEO
Anders Ullberg in a comment on the report. Demand for steel in Europe
continues to increase at a moderate rate and demand for the core niche
products, extra and ultra high-strength sheet as well as quenched steels
within the plate area, has remained strong on all markets.

- The main explanation for the increase in profit is precisely that
sales of our core niche products have grown so strongly, Anders Ullberg
points out. Deliveries of extra and ultra high-strength sheet increased
during the first half of the year by 37% compared with last year,
primarily due to increases in the truck and car segments. For deliveries
of quenched steels, the corresponding increase was 27%. The rate of
increase was significantly in excess of what is required to achieve our
strategic goals of increasing volumes of extra and ultra high-strength
sheet by 100% and volumes of quenched steels by 50% over a five-year
period.

- Profit has also benefited from the fact that our processing costs in
absolute terms were lower than during the first half of last year. This
has been achieved through a number of cost-cutting projects which
commenced during the second half of last year, continues Anders Ullberg.

- Today's report demonstrates that the activities and projects we have
carried out within our focus areas, namely to increase volumes of core
niche products, to hold down processing costs and to create a strong
cash flow, have achieved the desired effect, emphasises Anders Ullberg.

Anders Ullberg concludes by stating that prices for both steel products
and raw materials are increasing significantly. Based on the agreements
that have been reached, it is believed that during the third quarter
prices for sheet and plate in local currencies will on average be
approx. 10% higher than during the second quarter. At the same time, raw
materials costs during the second half of the year will be significantly
higher. For example, costs for coal and coke will be almost SEK 300
million higher than during the first half of the year.