Rautaruukki Oyj gained the most in more than two months after the Finnish maker of special steels reported a profit for the first time in nine quarters as cost cuts helped contain lackluster European demand.
Third-quarter net income gained 31 million euros ($43 million) to 1 million euros, beating the average estimate of a loss of 3.9 million euros in a Bloomberg survey of 11 analysts. Rautaruukki advanced as much as 8.6 percent, the most since Aug. 8. Shares in the Helsinki-based company gained 8.3 percent at 6.23 euros by 12:51 p.m. in the Finnish capital.
“Improvements have come mostly from internal measures,” Chief Executive Officer Sakari Tamminen said in a briefing in Helsinki today. “We don’t expect any significant upturn in European steel demand during the next few years.”
Slow global growth has damped metal prices in the aftermath of the financial crisis. European steelmakers are struggling with too many furnaces as imports from Asia worsen a supply glut amid declining demand from carmakers and construction companies. As a result, competitors ThyssenKrupp AG and Outokumpu Oyj are cutting thousands of jobs in Europe.
Rautaruukki lowered its sales forecast for the year to about 2.5 billion euros from 2.6 billion euros seen earlier. Third-quarter sales of 592 million euros fell 5 percent from last year and missed analyst estimates by 3.7 percent.
The company said today it will prepare for 30 million euros in additional savings in its metals unit, after having achieved the goal of profitable operations with 80 percent capacity utilization set in February last year. This brings total targeted savings to 130 million euros from early 2012.
European demand seems to be “corrected to a new sustainable level” even as the recovery is expected to be “modest,” Tamminen said in a statement.