Finland strikes impact Outokumpu and Boliden

Many trade unions in Finland have carried out political strikes during the quarter. Strikes have been announced to continue for a third week, delaying the end of the strike to March 31, 2024.

These circumstances led many companies to change their business plans, including Outokumpu and Boliden.

Impact on Outokumpu

As a result of strikes, Outokumpu on Thursday announced further downgrades of its guidance for the first quarter of 2024 and expects its adjusted EBITDA to be lower compared to the fourth quarter of 2023 (Q4/23: EUR 72 million).

“On March 11, 2024, when the political strike in Finland started, Outokumpu downgraded its guidance for the first quarter of 2024 and expected its adjusted EBITDA to be at a similar or lower level compared to the fourth quarter of 2023. The negative impact of this 14-day strike on Outokumpu’s adjusted EBITDA was estimated to be approximately EUR 40 million.

As a result of the continuation of the political strike, Outokumpu now further downgrades its guidance for the first quarter. The negative impact of the additional seven days’ strike on Outokumpu’s adjusted EBITDA is estimated to be approximately EUR 25 million.

The total negative impact of the three weeks’ political strike on Outokumpu’s adjusted EBITDA is estimated to be approximately EUR 65 million of which approximately half is expected to be realized in the first quarter and the remaining in the second quarter.

Also, due to the same reason, Outokumpu’s stainless steel deliveries in the first quarter of 2024 are expected to be slightly lower compared to the fourth quarter of 2023.

The majority of Outokumpu’s stainless steel and ferrochrome operations as well as the Tornio port in Finland have been shut down since the beginning of the strike. The strike also impacts indirectly the company’s operations in other countries through the disruption in internal material flows in both Europe and the Americas.

The political strike is aimed against the Finnish government and is not related to Outokumpu’s labour relations,” Outokumpu states.

Impact on Boliden

Strikes in Finland also have affected Boliden’s access to critical infrastructure such as railways and harbours.

“The strikes do not involve Boliden as a negotiating party, and the impact on production has been limited. If the announced extension of the ongoing strike until March 31 is carried out, the total impact on Boliden’s operating profit in the first quarter of 2024 is estimated to be approximately SEK 500 million (EUR 43,8 million), whereof SEK 200 million (EUR 17,5 million) is due to reduced production and SEK 300 million (EUR 26,3 million) to delayed deliveries to customers, “Boliden says in its press release published on Friday.

“The effect due to delayed deliveries is temporary and expected to be regained during the second quarter. The negative cash flow impact during the first quarter is now estimated to be approximately SEK 1 billion (EUR 87,5 million), which is higher than previously communicated following the extended strike. Some impact on production is also expected during the second quarter, based on currently assumed circumstances,” Boliden concludes.