S&P Global Ratings upgraded the long-term issuer credit rating for Swedish steelmaker SSAB to BB+, from BB, with a stable outlook.

The revision was driven by the company's strong results in the first quarter on the back of an improvement in the product mix toward specialty steel and a reduction in operating costs.

The rating agency said May 27 it expects SSAB to generate EBITDA of 9 billion to 10 billion Swedish kronor this year, and use majority of its cash flow to reduce debt.

The stable outlook reflects S&P's expectations that the steelmaker will continue deleveraging this year and in 2020 on the back of healthy steel industry conditions, which will provide a buffer against a future downturn of the industry.

S&P said the company's rating could be lowered if its performance showed less resilience than expected to a potential downturn or operational challenges; however, the chance of a downgrade is "remote" in the next 12 to 18 months.

SSAB's net profit attributable to shareholders in the first quarter surged to 1.28 billion kronor, from 665 million kronor a year ago, mainly driven by strong results from its SSAB Americas and SSAB Special Steels units.

Sales climbed to 20.02 billion kronor from 17.39 billion as a 4% year over year drop in steel shipments to 1.7 million tonnes was offset by higher realized prices.

As of May 27, US$1 was equivalent to 9.58 Swedish kronor.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.