Rautaruukki adjusts steel production and continues actions to improve efficiency. The company expects 2008 operating profit to remain at 2007 level.

(From Hugin)

Rautaruukki Corporation Stock exchange release 1 December 2008 at 9:00

Rautaruukki is to adjust steel production and other operations in line with weakened demand and stock levels. Due to the weakened market situation, Rautaruukki now expects comparable consolidated net sales for the current year to be slightly higher than in 2007 and operating profit, excluding non-recurring items, to be at the same level as in 2007. The company earlier expected comparable consolidated net sales would remain somewhat below the 10 per cent growth target and operating profit would be higher than in 2007.

Rautaruukki is continuing actions to further improve operational and cost efficiency under the Boost programme, launched in October this year.

In the context of adjustment and efficiency measures, the company is to start employer-employee negotiations about possible lay-offs, redundancies and part-time working in different market areas. The number of lay-offs will become clear as these negotiations proceed.

In addition, there will also be a reduction in the use of temporary and agency workers.

Actions to improve efficiency aim at permanent cost savings of around EUR 60 million at an annual level. In Finland, it is estimated efficiency measures will involve the loss of a maximum of 520 jobs, most of which relate to improving efficiency within the steel business and steel service centres. Corporate-wide, the company estimates it needs to reduce around 1,000 jobs. Where possible, retirement arrangements will also be used and the possibility of staff relocation is also being studied. These actions are expected to result in non-recurring costs of around EUR 10 million, which will be recognised in the last quarter of 2008.