Weakened margins affect profit

10/27/1999 7:57 AM EST

SSAB today presented its report for the first three quarters of the year.
Profit after financial items declined by SEK 1,053 million to SEK 146 (1,199)
million.

- SEK 850 million of the drop in profit is due to weakened margins in the
steel operations as a result of the steep drops in prices during the second
half of last year and the first quarter of this year, says CEO Torsten Sandin
in a comment on the report.

- Prices bottomed out during the first quarter and since then we have been
able to slightly increase hot-rolled sheet prices on certain markets. The
balance on the market has gradually improved. Therefore, during the fourth
quarter we will be able to increase most sheet product prices on most markets,
adds Torsten Sandin. The price increases will have a limited effect during the
fourth quarter, and the full impact will only be felt commencing with the
first quarter of next year.

-Our focus on costs and cash flow has yielded results. Despite higher volumes
in the steel operations and wage increases this year of approx. 3%, our
processing costs in absolute numbers this year are somewhat lower than last
year. Cash flow was positive even in the seasonally weak third quarter and
thus far this year has amounted to just over SEK 500 million, i.e. almost SEK
750 million higher than last year, concludes Torsten Sandin.