* Debt-to-equity ratio rises
* Pushes back closure of plant in Bochum, Germany
* Shares fall 2 percent (Adds news on German plant)
By Ritsuko Ando
HELSINKI, Feb 13 (Reuters) - Finnish stainless steel maker Outokumpu reported a higher debt ratio on Thursday, raising concerns over its financing costs and the slow pace of restructuring in response to weak European demand.
Outokumpu trimmed its underlying operating loss by more than expected in the fourth quarter of 2013 and said it expects the loss to shrink again in the first three months of this year due to an uptick in demand and some improvement in prices.
However, even with signs of a pickup, analysts estimate Europe's stainless steel makers still have overcapacity of around 25 percent.
Capacity cuts have been slow to materialise as producers balk at redundancy costs and the market share losses they must accept in the short term.
Outokumpu said on Thursday it was pushing back the closure of a plant in Bochum, Germany, from this year to 2016 at the earliest due to customer commitments and costs of moving production elsewhere. It also deciding against shutting down mills in Nyby, Sweden and Dahlerbruck, Germany.
"There is a lot of pressure on the company to improve the profitability of its operations," said Inderes analyst Antti Viljakainen. "They tried to cut costs and I believe they had some success, of course. But they need more of a turnaround, faster."
Outokumpu's debt-to-equity ratio was 188 percent at the end of 2013, compared with 171 percent three months earlier and much higher than peers, raising the risk it could find it harder to obtain finance in the future.
Many other European industrial companies have debt-to-equity ratios well below 80 percent, with Swedish high-strength steel maker SSAB at 69 percent.
Outokumpu shares closed 2 percent lower at 0.40 euros. Analysts said a planned 650 million euro rights issue, which was announced in November and is expected within the next few months, may not be enough to strengthen the company's balance sheet.
Although operating cash flow rose to 223 million euros ($303 million) from 43 million, that was mainly due to inventory cuts and the company forecast it would consume cash in this quarter.
Outokumpu is still struggling to turn a profit from its acquisition in 2012 of ThyssenKrupp's Inoxum unit.
Regulators forced it to sell a mill in Terni, Italy, as a condition for approving the Inoxum deal. In December it announced it would sell the mill and an alloy unit back to ThyssenKrupp - a move regulators approved this week.
Chief Executive Mika Seitovirta said meeting regulatory requirements had been a drain on the company.
"The Terni remedy requirement did not only tie up our time and resources, but also significantly hampered the ramp-up of the Calvert stainless steel mill in Alabama, USA," he said.
He said however that the Inoxum deal was likely to yield more cost savings in the future.
In the fourth quarter, Outokumpu cut quarterly underlying operating losses to 90 million euros from 169 million in the same quarter last year. Analysts on average expected a loss of 122 million, according to a Reuters poll.
Outokumpu said it will discontinue operations in Kloster, Sweden, because it was loss making despite cost cuts begun in 2011. The plant, with 170 employees, produced about 18,000 tonnes of stainless steel in 2013.
"Continued high level of Asian imports into Europe, high pricing pressure and sluggish economic outlook in Europe mean that we need to take further actions to drive down our costs," Seitovirta said. ($1 = 0.7359 euros) (Additional reporting by Tom Kackenhoff in Dusseldorf; Editing by Erica Billingham)