18th Aug 2008 07:00
AL EZZ STEEL REBARS REPORTS CONSOLIDATED HALF YEAR 2008 RESULTS
Cairo, 17 August 2008 - Al Ezz Steel Rebars S.A.E. ("ezzsteel") (CASE: ESRS; London Stock Exchange: AEZD), the largest independent producer of steel in the MENA region and market leader in Egypt, today announced its consolidated first half results for the period ending 30 June 2008. The audited results have been prepared in accordance with Egyptian Accounting Standards.
Paste the following link into your web browser to download a PDF of the full financial statements related to this announcement:
http://www.rns-pdf.londonstockexchange.com/rns/4907B_-2008-8-17.pdf
Key highlights
|
EGP |
H1 2007 |
H1 2008 |
YoY+/- |
| Net sales |
7.8bn |
11.1bn |
+41% |
| Gross profit |
1.9bn |
2.7bn |
+44% |
| EBITDA* |
2.1bn |
2.7bn |
+32% |
| Net profit before tax |
1.5bn |
2.3bn |
+53% |
| Tax and deferred tax |
287mn |
435mn |
+51% |
| Net profit after tax and minority interests |
625mn |
1.0bn |
+63% |
| EPS on a weighted average number of shares |
3.49 |
5.69 |
+63% |
| Net debt to Equity |
1.14x |
0.7x |
|
*EBITDA = sales - cost of goods sold - selling & marketing expense - G&A expense + depreciation and amortisation
Operational Review
Sales
All of the below financial breakdowns are based on ezzsteel's consolidated financials which include a full consolidation of ezzsteel (ESR/ESM), EZDK and EFS.
|
Sales |
ESR/ESM |
EZDK |
EFS |
Total |
|
EGP Mn |
||||
|
Long |
3,014 |
3,981 |
6,996 |
|
|
Flat |
1,878 |
2,082 |
3,960 |
|
|
Others |
97 |
97 |
||
|
Total |
3,015 |
5,956 |
2,083 |
11,054 |
Consolidated net sales for H1 2008 were EGP 11.1 billion compared with EGP 7.8 billion during H1 2007, representing an increase of 41 per cent. Long steel products accounted for 64 per cent of total sales and flat steel products represented 36 per cent of sales in Q1 2008.
The contributions of ezzsteel, EZDK and EFS to net sales for the period ending 30 June 2008 were 27 per cent, 54 per cent, and 19 per cent respectively.
Exports
Sales of long products constituted a higher percentage of total consolidated net sales than in the first three months of the year as demand within the Egyptian market remained robust. A record 99 per cent of long production during H1 2008 was directed to the local market to fuel construction and development, in line with the Company's commitment to supply demand in the local market as a priority.
Flat sales are typically directed towards international markets, as illustrated below:
|
EGP Mn |
Domestic |
per cent |
Export |
per cent |
|
Long |
6,900 |
99% |
95 |
1% |
|
Flat |
1,521 |
38% |
2,439 |
62% |
Production
Long products production for H1 2008 reached 1,545,676 tons compared with 1,536,302 during H1 2007, representing a slight year-on-year increase.
Flat products production for H1 2008 was 859,639 tons compared with 834,386 tons during H1 2007, representing an increase of 3 per cent. EZDK flat products production increased by 11 per cent over the same period in 2007, this is attributable to the drop in production levels experienced during Q1 2007 resulting from a failure in the electricity transformer feeding the flat products plant.
Cost of Goods Sold
Consolidated cost of goods sold for H1 2008 represented 75 per cent of consolidated net sales. As the main input cost, the rise in global raw material costs is directly linked to the rise in total consolidated net sales. Correspondingly, consolidated cost of goods sold for H1 2008 rose 40 per cent on the same period in 2007.
Gross profit
Gross profit of EGP 2.7bn in H1 2008 represented an increase of 44 per cent over the EGP 1.9bn recorded in H1 2007, driven by the cost-revenue relationship resulting from higher global raw materials pricing experience since the beginning of 2008. Correspondingly, the company's gross profit margin remained stable at 24.7%.
EBITDA
EBITDA for the period reached EGP 2.7 billion, up from EGP 2.1 billion for the same period in 2007 reflecting a rise of 32 per cent.
Tax and deferred tax
ezzsteel remains one of the largest corporate tax payers in Egypt with Tax and deferred tax reaching EGP 435million in H1 2008, compared to EGP 287 million in H1 2007.
Net profit after tax and minority interests
In H1 2007, net profit after minority interests was EGP 1.0 billion, up 63 per cent in comparison to the same period in 2007.
This has delivered earnings per share (EPS) of EGP 5.69 in H1 2008 versus EGP 3.49 per share in H1 2007 on a weighted average number of shares basis. Divisional Overview
|
EZDK Performance |
|
|
|
||||||||||||
|
Sales (EGP): |
Jun-07 |
Jun-08 |
|
||||||||||||
|
Value |
4.3 |
6.0 |
BN |
||||||||||||
|
Volume |
|
||||||||||||||
|
Long |
926,408 |
890,300 |
Tonnes |
||||||||||||
|
Flat |
383,783 |
445,186 |
Tonnes |
||||||||||||
|
Export as % of Sales |
|
||||||||||||||
|
Long |
13% |
2% |
|
||||||||||||
|
Flat |
46% |
40% |
|
||||||||||||
|
|
|
||||||||||||||
|
EBITDA |
1.7 |
2.3 |
BN |
||||||||||||
|
Production |
Jun-07 |
Jun-08 |
|
||||||||||||
|
Long Product |
864,057 |
876,711 |
Tonnes |
||||||||||||
|
Flat Product |
358,850 |
398,750 |
Tonnes |
||||||||||||
|
Billets |
942,660 |
961,060 |
Tonnes |
||||||||||||
|
ESR/ERM Performance |
|
|
|
||||||||||||
|
Sales (EGP): |
Jun-07 |
Jun-08 |
|
||||||||||||
|
Value |
2.2 |
3.0 |
BN |
||||||||||||
|
Volume |
690,410 |
657,959 |
Tonnes |
||||||||||||
|
Export as % of Sales |
8% |
1% |
|
||||||||||||
|
EBITDA |
211 |
303 |
Mn |
||||||||||||
|
|
|
||||||||||||||
|
Production |
Jun-07 |
Jun-08 |
|
||||||||||||
|
Long |
672,245 |
659,933 |
Tonnes |
||||||||||||
|
Billets |
400,408 |
397,175 |
Tonnes |
||||||||||||
|
EFS Performance |
|
|
|
||||||||||||
|
Sales (EGP): |
Jun-07 |
Jun-08 |
|
||||||||||||
|
Value |
1.4 |
2.1 |
BN |
||||||||||||
|
Volume |
453,361 |
494,850 |
Tonnes |
||||||||||||
|
Export as % of Sales |
74% |
82% |
|
||||||||||||
|
EBITDA |
147 |
89 |
MN |
||||||||||||
|
|
|
||||||||||||||
|
Production |
Jun-07 |
Jun-08 |
|
||||||||||||
|
Flat Product |
475,536 |
460,889 |
Tonnes |
||||||||||||
|
|
|
||||||||||||||
Recent Developments
Subsequent to the close of the period under review, the company adopted a resolution on Wednesday 30 July, 2008 to invite all shareholders to subscribe to a capital increase by issuing 364,776,388 new shares at a par value of EGP 5 per share. Each existing share held at close of trading on the record date, Sunday 24 August, 2008, has the right to subscribe to two new shares.
The subscription period will start from 26 August 26, 2008 and last until 25 September 25, 2008. In the event the capital increase is fully subscribed to, the subscription period will be reduced accordingly.
The proceeds will be used, in part, to finance ezzsteel's expansion and integration strategy at existing facilities and its new regional base in Algeria.
- Ends -
For further information:
|
Ezz Steel |
Tel |
Mobile |
|
Kamel Galal |
+ 20 2 3762 2144 |
+ 20 10 539 5499 |
|
Capital MS&L |
||
|
Supriya Mathur |
+ 44 20 7307 5347 |
+ 44 7725 952 314 |
|
Nick Bastin |
+ 44 20 7255 5117 |
+ 44 7931 500 066 |
About Al-Ezz Steel Rebars Co. S.A.E.
Al Ezz Steel Rebars (ezzsteel) is the largest independent steel producer in the Middle East and North Africa, with a total actual capacity of 5.3 million tonnes of finished steel per annum in 2007. It is the Egyptian market leader with over 65 per cent market share in terms of sales.
In 2007, the Company produced 3.1 million tonnes of long products (typically used in construction) and 1.7 million tonnes of flat products (typically used in consumer / industrial goods). ezzsteel's customer base is geographically diversified, with flat products mainly directed to export markets, whereas long products are sold in the domestic market. More than 70 per cent of its plants are less than 10 years old using the latest in modern steel making technology.
Disclaimer:
This press release is issued by Al Ezz Steel Rebars S.A.E. ("ezzsteel" or the "Company"), in connection with the disclosure of the Company's financials results for the year 2007. This document includes forward-looking statements. These forward-looking statements include all matters that are not historical facts. In particular, the statements regarding the Company's strategy, the expected strength of demand for long products in Egypt and in regional markets and for flat steel in the international markets, and other future events or prospects are forward-looking statements. Recipients of this document should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors that are in many cases beyond the control of the Company. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance and the Company's actual results of operations, financial condition and liquidity, and the development of the industry in which the Company operates may differ materially from those made in or suggested by the forward-looking statements contained in this document. The cautionary statements set forth above should be considered in connection with any subsequent written or oral forward-looking statements that the Company, or persons acting on its behalf, may issue. Various factors could cause actual results to differ materially from those expressed or implied by the forward-looking statements in this document including worldwide economic trends, global and regional trends in the steel industry, the economic and political climate of Egypt and the Middle East and changes in business strategy of the Company and various other factors. These forward-looking statements reflect the Company's judgment at the date of this document and are not intended to give any assurances as to future results. The Company undertakes no obligation to update these forward-looking statements, and it will not publicly release any revisions it may make to these forward-looking statements that may result from events or circumstances arising after the date of this document. None of ezzsteel, or any of its directors, officers or employees or any other person can give any assurance regarding the future accuracy of the information set forth herein or as to the actual occurrence of any predicted developments nor shall assume, and each of ezzsteel, any of its directors, officers or employees or any other person expressly disclaims, any obligation, except as required by law, the listing rules of the CASE or the LSE or the FSA, to update any forward-looking statements or to conform these forward-looking statements to ezzsteel's actual results.
Related Shares:
Al Ezz Gds Regs