Rautaruukki Rises in Helsinki as Cost Cuts Help to Narrow LossesKasper Viita
Rautaruukki Oyj, a Finnish maker of stainless steel, advanced the most in five months in Helsinki trading as cost cuts and lower raw-material prices helped to reduce quarterly losses.
Rautaruukki rose as much as 6.9 percent, the most since Nov. 22. It traded up 5.9 percent at 4.94 euros as of 11:28 a.m. local time, the biggest gain among Finnish benchmark stocks.
The company said today its net loss narrowed to 4 million euros ($5.2 million) in the first quarter from 20 million euros a year earlier. That beat expectations for a 9.9 million-euro loss according to the average estimate of eight analysts surveyed by Bloomberg.
“Improved earnings performance was mainly attributable to efficiency-improvement projects we initiated about a year ago,” Chief Executive Officer Sakari Tamminen said in a statement.
Rautaruukki’s metals unit started an efficiency program in February last year and announced 250 job cuts in September. The Helsinki-based company expects to achieve its targeted cost cuts of 100 million euros and the improvement will be “fully visible” from the third quarter, Tamminen said.
Today’s gain pares the stock’s decline this year to 17 percent. The company has suffered from weakening demand in Europe, its main source of revenue.
“My expectations for 2013 are mildly optimistic thanks to our actions to improve efficiency and the business choices we have made, even though we cannot expect any significant help from a pick-up in the market,” Tamminen said.