Inside information: Outokumpu recognizes a deferred tax asset of approximately EUR 353 million related to its Americas business area with a positive one-off impact on net result in 2022

Outokumpu Oyj
Inside information
December 13, 2022 at 10.10 am EET

Inside information: Outokumpu recognizes a deferred tax asset of approximately EUR 353 million related to its Americas business area with a positive one-off impact on net result in 2022

As disclosed in the Financial Statements for 2021, Outokumpu Group had losses in the US operations at the end of 2021 that were not valued to the extent they exceeded the deferred tax liability. Year 2021 was the first profitable year for the Americas business area after a long history of losses, and the accounting assessment for deferred tax asset did not support the recognition of a net deferred tax asset.

In accordance with IFRS (International Financial Reporting Standards), the company will recognize a deferred tax asset, certain criteria having been met. When it is expected that the company will be profitable in future years, a deferred tax asset is to be recorded on the balance sheet if the losses are expected to be utilized before expiry. In 2022, the Americas business area has continued to contribute positively on the Group’s net result. Following two consecutive years of strong performance and expectations for continuing good performance, the condition for recording a deferred tax in the balance sheet is fulfilled. Based on current tax legislation (including but not limited to tax rate and limitations in utilization of tax losses) and accounting rules, a deferred tax asset of approximately EUR 353 million, representing the full value of US losses, will be recorded in Outokumpu Group’s 2022 income statement and balance sheet. Changes in tax legislation (including but not limited to tax rate changes and limitations in utilization of tax losses) or accounting rules may impact the valuation of the deferred tax going forward. Deferred tax asset is assessed for realizability as of each reporting date. If circumstances and facts indicate it is no longer probable that deferred tax assets will be utilized, adjustments will be made as necessary.

The recognition of the deferred tax assets will have a positive impact on the Outokumpu Group’s earnings per share in 2022 and a negative impact on one of its main key performance indicators, return on capital employed. The recognition will not have impact on the Group’s adjusted EBITDA nor the guidance for the fourth quarter of 2022. The recognition of the deferred tax asset will increase the Group’s tax rate going forward, but not impact cash taxes.

For more information:

Investors: Linda Häkkilä, Head of Investor Relations, tel. +358 400 719 669 

Media: Päivi Allenius, VP – Communications and Brand, tel. +358 40 753 7374 

Media desk, tel. +358 40 351 9840, e-mail media@outokumpu.com

Outokumpu is the global leader in stainless steel. The foundation of our business is our ability to tailor stainless steel into any form and for almost any purpose. Stainless steel is sustainable, durable and designed to last forever. Our customers use it to create civilization’s basic structures and its most famous landmarks as well as products for households and various industries. Outokumpu employs some 9,000 professionals in more than 30 countries, with headquarters in Helsinki, Finland and shares listed in Nasdaq Helsinki. www.outokumpu.com