Finnish metals and mining group Outokumpu yesterday reported a return to profits last year after soft prices and weak demand caused a loss in 1998, and said it expected healthy earnings this year.
The group's 1999 profit before extraordinary items of €98 million (£77 million), up from a €4 million loss in 1998, was expected as metals prices were known and the demand recovery apparent.
"The result of Outokumpu was satisfactory despite a weak beginning of the year. It is really worth noting that it was satisfactory; it certainly was not good," chief executive Mr Jyrki Juusela told a news conference.
Outokumpu, the owner of Europe's largest zinc mine - Tara in Co Meath - has said it is committed to keeping the mine in operation and wants to improve its productivity, but miners have opposed its planned reforms.
Mr Juusela said the company was still in mediation with the union, hoping for a solution in the next few days, as talks were conducted in positive mood, but he gave no details.
He said the company's prospects for this year were better since metal prices began rising towards the end of 1999 due to a strong US economy after slumping to historically low rates amid Asian and Russian economic crises in 1998 to early 1999.
Mr Juusela said higher stainless steel prices would be particularly important for Outokumpu.
The group's 1999 operating profit of €152 million included a €76 million gain on writing up the value of inventories and a €14 million refund of excess pension funds.
"This level is not at all satisfactory for Outokumpu and it does not meet our targets (which are) at a significantly higher level - I would like to say at twice this level - and we will probably get there," Mr Juusela said.
Mr Juusela said the company planned to investment €400 million this year, three-quarters of which would go into stainless steel production in Tornio where the company aimed to double capacity in three years.
He said the company would not begin any new, large-scale mining projects but was also not planning to sell any of its mines although its long-term aim is to reduce that business.
Dividends will rise to 25 cents a share from eight cents.
