Al Ezz Gds Regs Regulatory News (AEZD)

4 Jun 2007 07:30

Al EZZ Steel Rebars S.A.E.04 June 2007 AL EZZ STEEL REBARS REPORTS CONSOLIDATED Q1 2007 RESULTS • Net sales of EGP 3.7bn • Gross profit of EGP 900m • EBITDA* of EGP 985m • Net profit before tax of EGP 656m • Tax and deferred tax of EGP 133m • Net profit after tax and minority interests EGP 279m • EPS of EGP 1.55 • Net debt to Equity 1.09x *EBITDA = sales - cost of goods sold - selling & marketing expense - G&A expense+ depreciation and amortisation Cairo, 4 May 2007 - Al Ezz Steel Rebars S.A.E. ("Ezz Steel") (CASE: ESRS; LondonStock Exchange: AEZD), the largest independent producer of steel in the MENAregion and market leader in Egypt, today announced its consolidated Q1 2007results for the period ending 31 March 2007. The audited results have beenprepared in accordance with Egyptian Accounting Standards. Sales: Sales ESR/ESM EZDK EFS Total EGP Long 1,067,098,688 1,393,802,467 2,460,901,155 Flat 576,845,985 655,314,868 1,232,160,853 Others 575,351 31,930,758 1,021,021 33,527,130 Total 1,067,674,039 2,002,579,210 656,335,889 3,726,589,138 Net sales for the three months to 31 March 2007 surpassed EGP 3.7bn, with longsteel products accounting for 66% of total sales and flat steel productsrepresenting 33% of sales in the first quarter. The contributions of Ezz Steel,EZDK and EFS to net sales for the period ending 31 March 2007 were 29%, 54%, and17% respectively. The Egyptian market remains the main focus for long products with only 13% ofsales going to export markets during the quarter. As in prior periods, exportsto international markets accounted for the majority of flat products sales, asillustrated below Domestic % Export % Flat 531,930,691 43% 700,230,162 57% Long 2,131,544,599 87% 329,356,556 13% Cost of Goods Sold: ESR/ESM EZDK EFS The CompanySales 1,067,674,039 2,117,733,602 658,756,841 3,726,589,138COGS 963,596,697 1,372,633,019 608,461,542 2,829,132,622COGS / Sales 90% 65% 92% 76% A Cost of Goods sold breakdown by subsidiary can be seen above, showing theconsiderably stronger margins in the EZDK business, resulting from itsvertically integrated structure. Ezz Steel intends to replicate EZDK'ssuccessful business model in the Company's other business units to increase theCompany's overall profitability. Net profit after minority interests for the period was EGP 279m. This hasdelivered EPS of EGP 1.55 per share, a 26% increase from EGP 1.23 per share in1Q 2006 on a weighted average number of shares basis. Outlook The Company expects to maintain its current performance and to further benefitfrom the continued enhancements to flat steel production at EFS. The Companyexpects that there will continue to be strong demand for long products in boththe Egyptian and regional markets. Demand for flat steel products is alsoexpected to continue in line with current performance. The company will also continue to pursue the following: • Vertical integration - Value creation through investments along thevalue chain such as the planned Direct Reduction plant in Suez City to provideDirect Reduced Iron (DRI) to Ezz Steel and its subsidiaries. • Horizontal integration - Capacity expansion of existing facilities atmarginal investment cost through an additional meltshop at the Suez City plantto serve the growing international demand for flat steel. • Geographic expansion - Continual evaluation of possible cross borderinvestments in the Middle East and North Africa region with high growthpotential and where ESR will have a competitive edge, starting with theestablishment of a steel making factory in Algeria to serve the booming Algerianconstruction industry. Comment Mr. Ahmed Ezz, Chairman and Managing Director of Ezz Steel, said: "Ezz Steel's strong first quarter performance reflects the company's continuedability to strengthen its leading position in the Egyptian and MENA region'ssteel industry. This performance reflects the benefits of consolidation accruingto the business in robust market conditions. We remain confident in the outlookfor the remainder of 2007." Divisional Overview Please note that the below mentioned overview reflects the Q1 2007 performanceof each entity on a stand alone basis rather than the consolidated portionswithin the Ezz Steel consolidated financials for the three months to 31 March2007. Q1 2006 Q1 2007 % DifferenceEZDKSales: Value: 1,929,482,076 2,117,733,602 +9.8% Volume: 785,832 714,232 -9.1%Production Tonnes Long Products 403,724 432,600 +7.2% Flat Products 245,312 147,951 -39.7% DRI 758,995 679,030 -10.5% Billets 446,969 457,061 +2.3%Exports as % of Sales: 29.1% 22.6% Long: 15.0% 18.9% Flat: 57.4% 41.3% EBITDA 737,469,015 802,656,331ESR/ESMSales: Value: 795,926,821 1,067,674,039 +34.1% Volume: 321,714 353,008 9.7%Production Tonnes Long Products 319,213 339,761 +6.4% Billets 194,426 208,037 +7.0%Exports as % of Sales 7.3% 7.0% EBITDA 54,776,139 110,126,303EFSSales: Value: 441,323,393 658,756,841 +49.3% Volume: 174,252 226,528 30.0%Production Tonnes Flat Products 165,303 222,780 +34.8%Exports as % of Sales 81.0% 71.7% EBITDA 62,302,951 75,360,761 Enquiries:Ezz Steel Tel MobileKamel Galal + 20 2 762 2144 + 20 10 539 5499 Capital MS&LNicholas Bastin + 44 20 755 5117 + 44 7931 500066Neil Doyle + 971 4367 6160 + 971 508 432 465Jennifer Martin + 44 20 7307 5335 + 44 7841 401304 About Al-Ezz Steel Rebars Co. S.A.E. Al Ezz Steel Rebars (Ezz Steel) is the largest independent steel producer in theMiddle East and North Africa, with a total actual capacity of 5.3 million tonnesof finished steel per annum in 2006. It is the Egyptian market leader with over65% market share in terms of sales. In 2006, it produced 3.0 million tonnes oflong products (typically used in construction) and 1.8 million tonnes of flatproducts (typically used in consumer / industrial goods). Ezz Steel's customerbase is geographically diversified, with flat products mainly directed to exportmarkets, whereas long products are typically sold in the local and regionalmarkets. More than 70% of its plants are less than 10 years old using the latestin modern steel making technology. Disclaimer: This press release is issued by Al Ezz Steel Rebars S.A.E. ("Ezz Steel" or the "Company"), in connection with the disclosure of the Company's financials resultsfor the year 2006. This document includes forward-looking statements. Theseforward-looking statements include all matters that are not historical facts.In particular, the statements regarding the Company's strategy, the expectedstrength of demand for long products in Egypt and in regional markets and forflat steel in the international markets, and other future events or prospectsare forward-looking statements. Recipients of this document should not placeundue reliance on forward-looking statements because they involve known andunknown risks, uncertainties and other factors that are in many cases beyond thecontrol of the Company. By their nature, forward-looking statements involverisks and uncertainties because they relate to events and depend oncircumstances that may or may not occur in the future. Forward-lookingstatements are not guarantees of future performance and the Company's actualresults of operations, financial condition and liquidity, and the development ofthe industry in which the Company operates may differ materially from those madein or suggested by the forward-looking statements contained in this document.The cautionary statements set forth above should be considered in connectionwith any subsequent written or oral forward-looking statements that the Company,or persons acting on its behalf, may issue. Various factors could cause actualresults to differ materially from those expressed or implied by theforward-looking statements in this document including worldwide economic trends,global and regional trends in the steel industry, the economic and politicalclimate of Egypt and the Middle East and changes in business strategy of theCompany and various other factors. These forward-looking statements reflect theCompany's judgment at the date of this document and are not intended to give anyassurances as to future results. The Company undertakes no obligation to updatethese forward-looking statements, and it will not publicly release any revisionsit may make to these forward-looking statements that may result from events orcircumstances arising after the date of this document. None of Ezz Steel, or anyof its directors, officers or employees or any other person can give anyassurance regarding the future accuracy of the information set forth herein oras to the actual occurrence of any predicted developments nor shall assume, andeach of Ezz Steel, any of its directors, officers or employees or any otherperson expressly disclaims, any obligation, except as required by law, thelisting rules of the CASE or the LSE or the FSA, to update any forward-lookingstatements or to conform these forward-looking statements to Ezz Steel's actualresults. By accepting any copy of this document, you agree to be bound by the foregoinglimitations and restrictions. Paste the following link into your web browser to download the PDF document related to this announcement: http://www.rns-pdf.londonstockexchange.com/rns/6829x_-2007-6-4.pdf This information is provided by RNS The company news service from the London Stock Exchange