Aperam CEO says diversification has reduced dependence on Europe

By Javi West Larrañaga

July 30 (Reuters) - Luxembourg-based steelmaker Aperam no longer depends on Europe for most of its earnings after years of diversification, although it still stands to benefit from the region's steel recovery, Chief Executive Sud Sivaji told Reuters on Thursday.

"When Europe was suffering, we did not sit still. We diversified and transformed into this high-value materials company," Sivaji said, referring to the group's Brazilian, North American and distribution businesses, among others.

Until 2020-2021, Europe accounted for around 60%-70% of Aperam's EBITDA, he said.

"Now, if you took out Europe, we'd still make 60%-70% of our EBITDA," Sivaji said.

Despite that shift, Aperam expects to benefit from improving conditions in Europe, where tighter import restrictions and the gradual rollout of the EU's carbon border levy have helped lift stainless-steel prices.

Sivaji expects stainless-steel imports to fall to 17%-18% of the market from 22%-23% currently, creating market-share opportunities for European stainless-steel producers.

Aperam reported adjusted second-quarter EBITDA of €130 million on Thursday, slightly ahead of analysts' expectations of €127.3 million in an LSEG poll.

Its shares nevertheless fell after the company forecast lower third-quarter earnings because of the seasonal summer slowdown.

"The market doesn't want to accept seasonality in Europe," Sivaji said. "I remain confident that during the day and over the next days when they understand it's seasonality, this should be okay."

Shares, which were down as much as 9.1% in early trading, pared losses to trade about 1% lower by 1327 GMT.

(Reporting by Javi West Larrañaga in Gdansk, editing by Matt Scuffham)