By Matteo Allievi and Natalia Siniawski
(Reuters) - Spanish steelmaker Acerinox beat first quarter net profit expectations on Thursday, driven by growth in its U.S. operations, and forecast slightly better earnings in the second quarter.
Net profit was 136 million euros ($150 million), well above analysts' average forecast of 83 million euros, according to Refinitiv data. Its shares rose 3.5% in early trading.
Acerinox sank into the red in late 2022 as soaring energy costs stemming from Russia's invasion of Ukraine took a toll on the steel market after the post-COVID economic recovery had briefly turned its mills into cash machines in late 2021.
Robust demand for steel in early 2023 in the United States, its biggest market, offset persisting difficulties in Europe, it said.
"We are still prudent in Europe, as inventories still remain high and they could take more than the second quarter to normalise," finance chief Miguel Ferrandis Torres told in a conference call.
"Energy prices are not as crazy as before but they are still high, affecting the cost of our production," he added.
The World Steel Association upgraded last week its forecast for global steel demand, which is now expected to rise by 2.3% this year to 1.82 billion tonnes. However, persistent inflation and monetary tightening will continue to weigh on steel demand, it warned.
Acerinox's earnings before interest, taxes, depreciation and amortisation rose to 226 million euros, a figure it said it expected to be higher in the second quarter thanks "to the robustness of the high-performance alloys sector".
The company said in January it would invest $244 million to raise annual capacity by 20%, or 200,000 tonnes, at its largest U.S. stainless steel factory.
($1 = 0.9054 euros)