February 7, 2019 / 7:41 AM / 8 months ago

UPDATE 2-Outokumpu warns of weaker Q1, citing high inventories

(Adds shares, details on weak Americas business)

HELSINKI, Feb 7 (Reuters) - Finland’s Outokumpu warned on Thursday that first-quarter profit would weaken as high distributor inventory levels pressure the stainless steel market, sending its shares sharply lower.

Shares in Outokumpu dropped 9.3 percent to 3.64 euros by 0900 GMT, making it the biggest faller on the OMX Helsinki 25 Index. The overall index was up 0.4 percent.

In the fourth quarter the firm’s adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 9 percent to 89 million euros, in line with analysts’ average forecast of 89.2 million from a Reuters survey.

However the company forecast that EBITDA in the January to March period would be below 89 million euros, sharply down from 133 million a year earlier.

Outokumpu said the Americas business would continue to report weak results after posting an underlying loss of 22 million euros due to decreasing deliveries and prices.

“2018 marked an exceptional year for the European steel industry. The unforeseen trade disruption caused by the U.S. steel tariffs led to a surge of low-cost imports into Europe and to heavy price pressure that put a strain on the entire European steel industry,” chief executive Roeland Baan said in a statement.

“The EU’s permanent safeguards that are now in force are expected to stabilize the import situation in Europe during 2019,” Baan said.

Outokumpu’s largest competitors include China’s Tsingshan and TISCO, Spain’s Acerinox and Luxembourg-based Aperam . Shares in Aperam were down 1.6 percent at 28.04 euros and Acerinox was down 2.7 percent at 9.38 euros. (Reporting by Tarmo Virki; Editing by Jan Harvey)

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