Finnish steelmaker Rautaruukki said that it would cut costs in its construction unit after a poor showing in the business contributed to a wider than expected loss for the first quarter.

The company swung to an adjusted operating loss of EUR 15 million from a profit of EUR 25 million a year earlier. Analysts on average expected a loss of EUR 5 million. Rautaruukki's construction unit made the biggest loss of EUR 10 million in the quarter.

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Mr Sakari Tamminen CEO of Rautaruukki said that the performance was unsatisfactory and announced plans to cut costs in its construction business. The company aims to save a total of EUR 70 million by the second half of 2013.

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Rautaruukki also said it would withdraw from unprofitable markets, and discontinue manufacturing cabins and components in Shanghai.

The company said it expects the construction business to pick up, and stuck to its full year outlook of 2012 net sales growth around 5% and comparable operating profit growth of to improve from 2011.

Read related article Ruukki posts operating loss for Q1 here on Metal Supply.