ezzsteel 3rd Quarter Results

ezzsteel Reports Consolidated Nine Months 2010 Results

Cairo, 2 December 2010 - ezzsteel (formerly: Al Ezz Steel Rebars S.A.E.) (EGX: ESRS; London Stock Exchange: AEZD), the largest independent producer of steel in the MENA region and market leader in Egypt, today announced its nine months results for the period ending 30 September 2010. The audited results have been prepared in accordance with Egyptian Accounting Standards.

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Key highlights

*EBITDA = sales - cost of goods sold - selling & marketing expense - G&A expense + depreciation and amortisation

Comment

Commenting on the results, Mr Paul Chekaiban, Managing Director of ezzsteel, said:

"Despite the deterioration in global steel prices during the quarter, and the associated market volatility, ezzsteel has again proven resilient and achieved positive breakeven. In addition, our year-on-year performance remained substantially higher than in the comparable period in 2009 thanks to our flexible and integrated business model.

An improvement in prices in the fourth quarter, combined with a reduction in volatility, are both positive signals for our 2011 outlook."

For further information:

About ezzsteel.

ezzsteel (formerly: Al Ezz Steel Rebars) is the largest independent steel producer in the Middle East and North Africa, and the Egyptian market leader, with a total actual capacity of 5.8 million tonnes of finished steel.

In 2009, the Company produced 3.3 million tonnes of long products (typically used in construction) and 1.0 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 50 per cent of its plants are less than 10 years old, using the latest in modern steel making technology.

Operational Review

All of the below financial breakdowns are based on ezzsteel's consolidated financials which include the financial performance of ESR/ERM, EZDK and EFS.

Sales & Production

Consolidated net sales for the first nine months of 2010 were EGP 11.6 billion, 23 per cent higher than in the same period in 2009, reflecting the higher volumes due to the restart of production at EFS in the previous quarter.

ezzsteel's long steel products are aimed towards the domestic market, while flat steel products are mainly directed towards the global steel market.

Long steel sales volume reached 2,357 thousand tonnes during the first nine months of 2010, representing a 2 per cent decrease over the 2,408 thousand tonnes sold during the same period in 2009. Flat steel sales volumes witnessed an increase from 762 thousand tonnes in 9M 2009 to 981 thousand tonnes for 9M 2010; an increase of 29 per cent, buoyed by the restarting of flat steel production at EFS.

Long steel products were 68 per cent of total sales in the first nine months of 2010, accounting for EGP 7,846 million, while flat steel products represented 31 per cent of sales at EGP 3,583 million. This is in comparison to a long:flat mix of 77 per cent to 22 per cent in the corresponding period in 2009 when the EFS facility was shut.

Long product exports accounted for 2 per cent of total long product sales due to the continued strength of the domestic market demand for long products. Flat product exports accounted for 59 per cent of total flat sales.

Long steel production volume reached 2,553 thousand tonnes during the first nine months of 2010 representing a 1 per cent increase over the 2,525 thousand tonnes produced during the first nine months of 2009. Flat steel production volumes increased by 60 per cent to 1,137 thousand tonnes.

On a plant basis, EZDK long steel production fell by 3 per cent year-on-year in comparison with 2009 to 1,377 thousand tonnes. ESR/ERM long production rose by 7 per cent to 1,176 thousand tonnes in the same period, resulting from the recent upgrading of the long products finishing line. Flat production at EZDK was 6 per cent higher at 751 thousand tonnes in comparison to the first nine months of 2009. After the restarting of the production line at EFS in the last quarter, the production at the facility is now 386 thousand tonnes for the period. Billet production at EFS has also started, producing 49 thousand tonnes during Q3 2010.

The contributions of ESR/ERM, EZDK and EFS to the consolidated net sales for the period ending 30 September 2010 were 31 per cent, 60 per cent, and 9 per cent respectively.

Cost of Goods Sold

Consolidated cost of goods sold for the period ended 30 September 2010 represented 88 per cent of sales, compared to 89 per cent for the same period in 2009.

Gross profit

Gross profit of EGP 1,427 million was recorded in 9M 2010, an increase of 37 per cent from the EGP 1,040 million recorded in the same period in 2009.

EBITDA

EBITDA for the period reached EGP 1,579 million, up from EGP 1,188 million for 2009, representing an increase of 33 per cent.

Net profit after tax and minority interests

For the year ending 30 September 2010, net profit after tax and minority interests was EGP 242 million, compared to the EGP 29 million reported for 9M 2009.

Liquidity and capital resources

At the end of the period, ezzsteel had cash on hand of EGP 694 million and net debt of EGP 8.6 billion. The company has gearing of Net Debt / Equity of 1.35 times.

Outlook

The price improvement that is taking place during the fourth quarter and the reduction in volatility are positive signals for the global steel sector.

The demand for steel products in the Egyptian market continues to remain at very high levels. This is derived primarily from construction growth and the restart of infrastructure projects.

The commencement of production at our new billet caster at EFS is the first milestone in our expansion plan. This will allow ezzsteel to further improve its internal performance in 2011.

Divisional Overview

- Ends -

Disclaimer:

This press release is issued and approved by Ezzsteel (formerly: Al Ezz Steel Rebars S.A.E.) (the "Company"), in connection with the disclosure of the Company's financial results for the 9 month period ending 30 September 2010. This press release 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 and flat products in Egypt and in regional and 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 expressed in or implied 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 the 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, 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. Furthermore, none of such parties shall assume, and each of them expressly disclaims, any obligation (except as required by law or the rules of the ESE, the LSE or the FSA) to update any forward-looking statements or to conform these forward-looking statements to Ezzsteel's actual results.