“Our third-quarter performance was solid. We delivered EUR 304 million of adjusted EBITDA, which is the best third-quarter result in Outokumpu’s history. We also reached a significant milestone by reducing our net debt to an all-time low level of EUR 90 million, and our balance sheet is now stronger than ever. This enabled Outokumpu's Board of Directors to approve a share buyback program of a maximum of 20 million shares.
Our stainless steel deliveries fell by 12% in a softening market with exceptionally high imports. Distributors accelerated de-stocking of commodity grades, while end-user demand remained stable.
Business area Americas contributed once again strongly with a very high adjusted EBITDA of EUR 135 million. The US market has been exceptionally robust, but it has been clearly showing signs of weakening in the third quarter.
The energy crisis and related uncertainty cast a shadow across the quarter especially in business areas Europe and Ferrochrome. Despite the challenges in the operating environment, adjusted EBITDA for business area Europe’s amounted to EUR 128 million.
Due to high electricity prices, we have been optimizing our ferrochrome production, which has led to lower production volumes, and adjusted EBITDA for business area Ferrochrome declined to EUR 34 million. We also decided to delay the restart of one of our three ferrochrome furnaces to at least the end of the first quarter of 2023.
Energy has become a major challenge in Europe. Therefore, we raise our energy efficiency improvement target to 8% by the end of 2024. To reach our new ambitious target, we will prioritize investments related to energy efficiency in the coming years and increase the annual capital expenditure for that by EUR 20 million for years 2023 and 2024. Annual capital expenditure for these years will remain limited to EUR 200 million.
We are determinedly progressing with our strategy. We concluded the first phase six months ahead of schedule and since then we have been ramping up the second phase. Having two customer-differentiated business lines, Advanced Materials and Stainless Europe, is proving to be a successful move in serving the specific needs of the two customer groups.
We have continued our strong emphasis on sustainability to further improve Outokumpu’s position as the sustainability leader in the stainless steel sector. Earlier this year we launched our emission-minimized product, Circle Green, which has raised interest and demand among our customers across segments.
In September, we announced our plans to investigate a biocoke and biomethane plant investment in Tornio, Finland. With this project, we aim to significantly reduce our direct CO2 emissions and increase energy self-sufficiency in Finland.
Market uncertainty will continue in the fourth quarter and beyond, and the global economy faces a risk of recession. Outokumpu is much more resilient than ever before, and our significantly strengthened balance sheet gives us the stamina and strength to see us through these challenging times."
Updated on November 3, 2022.