voestalpine AG — Earnings Release 1999

Feb 26, 1999

News Details

Ad-hoc | 26 February 1999 08:30

Ad hoc-Service: VOEST-Alpine Stahl AG

Ad hoc-Mitteilung übermittelt durch die DGAP. Für den Inhalt der Mitteilung ist allein der Emittent verantwortlich. —————————————————————————— VOEST-ALPINE STAHL Group: Best quarterly result since 1995 in spite of difficult environment 1st through 3rd quarter 1998/99: Turnover + 5,8 %, EBITD: + 23 %, EBIT: + 33,7 % At the close of the first three quarters of the 1998/99 business year, VOEST-ALPINE STAHL-Group’s business situation remains satisfactory, in spite of an environment that has become very difficult. With an operating result (EBIT) of approximately ATS 2 billion, the Group reports the best interim result for the first nine months since 1995. However, due to the current price levels, which are at historic lows, earning will rise only marginally before the end of the fiscal year. Further contributions to earnings are only expected at a very reduced level, due to another decrease in sales revenue of more than 5% during the current 4th Quarter. This will lead to an annual income on approximately the same level as last year’s earnings (EBIT 1997/98: ATS 2.1 billion). Business Development Satisfactory Capacity Utilization, but low Price Levels The oversupply during the last months – in particular in lesser quality steel and in the spot market – had a comparatively minor effect on VOEST-ALPINE STAHL-Group. This is the cause for the continued satisfactory capacity utilization at the individual business sites at the end of the 1998 calendar year. Only the seamless pipe plant of VOEST- ALPINE STAHLROHR KINDBERG GmbH alone had to reduce production significantly as previously announced, due to a sharp drop in oil and natural gas prices. A change in this situation is not anticipated for the current calendar year. Sales revenues have further decreased significantly in almost all product sectors of VOEST-ALPINE STAHL-Group. This negative development, which had already begun in the middle of last year, accelerated. On average, the prices in the 4th Quarter of the calendar year 1998 were approximately 5% below the level of the prior quarter. Raw steel production developed from April to December 1998 at the individual plants as follows: The Linz plant produced 2.72 million metric tons (1997: 2.69 million metric tons), the Donawitz plant 830,000 metric tons (932,000 metric tons). Raw steel production for the Group amounted to 3.55 million metric tons (3.63 million metric tons). The production of raw steel during the 1998 calendar year of 4.78 million metric tons, however, was slightly above the production of the 1997 calendar year (4.72 million metric tons). Significant Rise in Earnings All principal Group companies have closed the 3rd Quarter with markedly positive results. In comparison with the same period during the last business year, all significant corporate key figures rose, some of them significantly. Consolidated Group turnover at the end of the 3rd Quarter was ATS 27.1 billion or 5.8 % higher, the operating result before depreciation (EBIT) was ATS 3.9 billion ATS or 23 % higher and the Operating income (EBIT) was ATS 1.98 billion or 33,7 % higher than the comparative figures from the prior business year. FLAT PRODUCTS LONG GROUP PRODUCTS in ATS million 1st- 1st- 1st- 1st- 1st- 1st- in EURO million 3rd 3rd 3rd 3rd 3rd 3rd Quarte Quarte Quarte Quart Quarte Quarte r r r. er r r 1997/9 1998/9 1997/9 1998/ 1997/9 1998/9 8 9 8 99 8 9 Total Sales ATS 19,999 21,008 6,320. 6,639 25,645 27,151 EURO .0 .0 0 .0 .0 .0 1,453. 1,526. 459.3 482.5 1,863. 1,973. 4 7 7 1 EBITD ATS 2,733. 3,427. 526.0 571.0 3,181. 3,932. (Earnings before 0 0 38.2 41.50 0 0 EURO 198.6 249.0 231.2 285.7 Depreciation) EBIT ATS 1,235. 1,734. 326.0 310.0 1,482. 1,980. (Operating Income) 0 0 23.7 22.5 0 0 EURO 89.8 126.0 107.7 143.9 Employees 10,821 11,264 3,579 5,171 14,438 16,475 (Excluding apprentices) The increase in employees is due to the acquisition of VAE AG and METSEC plc, or rather their inclusion in the consolidation. Forecast First Signs of a Recovery The European Steel Industry expects that the extremely low price levels during the 1st calendar quarter of 1999 (some products as low as 40% below the levels achieved during the summer of 1998) marks the lowest point of the current steel cycle. A slight increase in prices during the 2nd calendar quarter 1999 (the first quarter of the 1999/2000 business year) is expected for some products. Inventory levels are also at normal levels once again, so that an upswing in the current steel cycle is expected during the next months. This could be negatively influenced by the closure of the American Steel market to outside companies, increased imports from South America after the devaluation of the Brazilian currency as well as further upheavals in the Asian markets With the 3rd Quarter the 1998/99 business year with respect to income has come to a close. Due to the renewed decrease in sales revenues of more than 5% during the current 4th Quarter, no further significant contributions to earnings are expected. This will bring the earnings for 1998/99 on the whole to approximately the same level as during the previous business year. Linz, February 26, 1999 Ende der Mitteilung