Earnings Release • Oct 28, 2010
Earnings Release
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Paris, October 28th, 2010
PRESS RELEASE
| • | 29% increase in the ERAMET group's turnover on 3rd quarter 2010 | ||||
|---|---|---|---|---|---|
| compared with the 3rd quarter 2009 |
| Turnover (€ millions) |
Q3 2010 | Q3 2009 | Change | 9 months 2010 |
9 months 2009 |
Change |
|---|---|---|---|---|---|---|
| ERAMET Manganese | 437 | 324 | + 35% | 1 369 | 889 | + 54% |
| ERAMET Nickel | 208 | 155 | + 34% | 691 | 465 | + 49% |
| ERAMET Alloys | 176 | 157 | + 12% | 554 | 577 | - 4% |
| Holding co. & eliminations | (2) | 1 | (7) | (2) | ||
| ERAMET group | 819 | 637 | + 29% | 2 607 | 1 929 | + 35% |
ERAMET group Chairman & CEO Patrick BUFFET stated, "The ERAMET group is continuing to implement its profitable growth strategy thanks to the studies and execution of ambitious growth projects in its different businesses, in order to strengthen its leadership positions in alloying metals, upscale metallurgy and strategic metals."
This rise is mainly due to the increase in manganese ore and alloys prices. Over nine months, turnover rose 54% compared with the same period in 2009 to total 1,369 M€.
Despite a slowdown in the 3rd quarter of 2010 compared with the high levels of the 1st half of the year, global carbon steel production rose 5% in the 3rd quarter of 2010 compared with the 3rd quarter of 2009. Over the first nine months it rose 20% compared with the same period in 2009 and is even higher than the first nine months of 2008.
Manganese alloys output increased 18% in the 3rd quarter of 2010 compared with the 3rd quarter of 2009, totalling 195,000 tons. Over nine months, manganese alloys production increased 47% compared with the same period in 2009, with a sharp rise in refined alloys. Manganese alloys shipments grew 16% over the first nine months of the year compared with the same period in 2009, given the substantial inventory reductions made in 2009.
Manganese ore and sinter production rose 46% over the 3rd quarter of 2010 compared with the same period in 2009 to total 881,000 tons. Over nine months it was 95% up on the same period in 2009, totalling 2,454,000 tons. External shipments of manganese ore and sinter grew 35% in the first nine months compared with the same period in 2009, given the substantial inventory reductions made in 2009.
CIF China spot prices (source: CRU) for manganese ore rose in the 3rd quarter of 2010, averaging 7.2 USD/dmtu compared with 5.9 USD/dmtu in the 3rd quarter of 2009. Europe spot prices for manganese alloys (source: CRU) rose by approximately 35% on average in the 3rd quarter of 2010 compared with the same period in 2009.
Turnover growth was mainly driven by rising nickel prices. Turnover for the first nine months of the year totalled 691 M€, a 49% increase from the same period in 2009.
LME nickel prices rose 20%, averaging 9.61 USD/lb. in the 3rd quarter of 2010 compared with the 3rd quarter of 2009.
Over nine months, global stainless steel production rose more than 20% compared with the same period in 2009. Global nickel demand rose more than 15% in the first nine months of the year compared with the same period in 2009.
Metallurgical nickel production in Doniambo grew 6% in the 3rd quarter of 2010 compared with the 3rd quarter of 2009. Nickel sales rose 3% during the same period.
ERAMET Alloys' business continued its gradual recovery, while remaining below pre-crisis levels. New orders continued to increase at the end of September 2010 compared with the end of September 2009
Société Territoriale Calédonienne de Participation Industrielle (STCPI) and the ERAMET Group jointly agreed on July 13th, 2010 to renew, on its end date September 13th, 2010 and for a further period running to December 31st, 2011, their shareholders' agreement with respect to Société Le Nickel-SLN. The agreement will continue for this period in all its provisions, plus the measures implemented in 2009 as regards the modernised governance of SLN.
The parties also agreed to enter into discussions in order to make amendments to the agreement, the guiding principles of which will be unchanged, with the aim of taking account of the industrial, commercial and technological changes that have occurred at SLN and in its environment since the initial agreement was entered into.
On October 20th, 2010, ERAMET and the Gabonese Republic signed an agreement with the aim of increasing the Gabonese Republic's shareholding in COMILOG, which is to date 67.25% held by ERAMET and 25.4% held by the Gabonese Republic, with the remaining capital held by various private investors.
This agreement provides for the sale by ERAMET to the Gabonese Republic, in several stages over the 2010-2015 period, of an additional shareholding of up to 10% of COMILOG, which would increase the Gabonese Republic's share of COMILOG's capital to 35.4%.
As at the end of September 2010, the ERAMET group's consolidated net cash further improved compared with the already high level at the end of June 2010.
The ERAMET group has sound financial capacity that enables it to implement its ambitious growth strategy in alloying metals and high-performance alloys, upscale metallurgy and strategic metals with high growth potential.
Given the expected trends in all its activities, the Group's current operating income for the 2nd half of 2010 should be of the same order as the 1st half of 2010.
ERAMET is a leading global producer of:
ERAMET is also developing in new metals with high growth potential such as lithium and in recycling.
The Group employs approximately 15,000 people in 20 countries. ERAMET is part of Euronext Paris Compartment A and is listed on the MSCI index.
Vice President Strategy and Investor Relations Philippe Joly Tel.: +33 (0)1 45 38 42 02 For more information: www.eramet.com
| Metric tons | Q3 2010 | Q3 2009 | Change | 9 months 2010 |
9 months 2009 |
Change |
|---|---|---|---|---|---|---|
| Manganese ore and sinter production |
880 700 | 605 000 | + 46% | 2 454 000 | 1 258 000 | + 95% |
| Manganese alloys production |
195 200 | 165 500 | + 18% | 599 700 | 406 600 | + 47% |
| Manganese alloys sales |
183 200 | 211 000 | - 13% | 573 000 | 495 600 | + 16% |
| Nickel production* | 13 168 | 12 435 | + 6% | 39 952 | 38 731 | + 3% |
| Nickel sales** | 11 369 | 10 972 | + 3% | 39 502 | 40 470 | - 2% |
* Ferronickel and matte
** Finished products
| Turnover (€ millions) |
Q2 2010 | Q2 2009 | Change | Q1 2010 | Q1 2009 | Change |
|---|---|---|---|---|---|---|
| ERAMET Manganese | 523 | 277 | + 89% | 409 | 288 | + 42% |
| ERAMET Nickel | 282 | 154 | + 83% | 201 | 156 | + 29% |
| ERAMET Alloys | 196 | 198 | - 1% | 182 | 222 | - 18% |
| Holding co. & eliminations | (2) | (1) | (3) | (2) | ||
| ERAMET group | 999 | 628 | + 59% | 789 | 664 | + 19% |
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