Al Ezz Gds Regs Regulatory News (AEZD)

EZZSTEEL REPORTS CONSOLIDATED 9M 2013 RESULTS

Cairo, 10 February 2014 - ezzsteel (EGX: ESRS; London Stock Exchange: AEZD), the largest independent producer of steel in the MENA region and market leader in Egypt, today announced its consolidated results for the period ending 30 September 2013. 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:

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Key highlights

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

** EPS = Net profit after tax & Minority Interest / No. of shares at the end of the period 

Comment

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

"The overall performance during 9M 2013 registered substantial improvements compared to the same period of 2013.Though the generated margins of Q3 2013 suffered from the economic disruption due to the second revolution in Egypt, our operational performance in terms of production and sales remained quite robust.

"In parallel, the constant progress in the construction of our DRI plant, coupled with the gradual return of political stability in our country, will allow us, we expect, to further improve the profitability of our business in future reporting periods."

For further information:

ezzsteel

About ezzsteel

Ezzsteel is the largest independent steel producer in the Middle East and North Africa, and the Egyptian market leader, with a total actual capacity of 5.8million tonnes of finished steel.

In 2012, the Company produced 3.9million tonnes of long products (typically used in construction) and 893,000 tonnes of flat products (typically used in consumer / industrial goods). ezzsteel deploys the latest in modern steel making technology and is committed to further increasing vertical integration across its plants, to boost operational flexibility.

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 9M 2013 were EGP 16.0 billion, which represents an increase of 8 per cent year on year. This increase in sales is due to stronger prices for both long and flat in the domestic market, as well as higher realized selling prices for flat steel internationally, although long product export prices were slightly weaker: long product prices increased by 8 per cent year on year in the local market. Flat export prices increased by 6 per cent, with local prices increasing by 4 per cent only.

Long products accounted for EGP12.6 billion or 79 per cent of sales in 9M 2013, while flat steel products represented 20 per cent of sales at EGP 3.2 billion. While the domestic house building market continued to remain strong, in line with previous financial periods, ezzsteel has increased its exports of long product sales volumes to 9 per cent of long production. Flat product exports accounted for 45 per cent of total flat sales.

Long sales volumes reached 2.82 million tonnes during 9M 2013, 1per cent higher than the 2.80 million tonnes sold during the same period last year, setting a new record in the volume of long product sales since the establishment of the company.

Flat sales volumes, which are concentrated at EZDK, increased by 4per cent to 728 thousand tonnes in 9M 2013, compared with 697 thousand tonnes during 9M 2012. This reflects the continued concentration of production at EFS on long products and billets, to control costs and meet continued demand for long products.

The group's consolidated sales volumes reached a total of 3.55 million tonnes in 9M 2013, an increase of 1per cent from the 3.5 million tonnes sold in 9M 2012.

The contributions of ESR/ERM, EZDK and EFS to the consolidated net sales for the period ending 30 September 2013 were 28 per cent, 63 per cent, and 9 per cent respectively.

Long steel production volumes totalled 2.8million tonnes during 9M 2013,down 4 percent compared to 9M 2012, due to the curfew that was implemented in Egypt throughout most of the third quarter. Flat steel production volumes increased by 7per cent to 733,786 tonnes for the period, compared to 682,778 tonnes in the previous year.

Cost of Goods Sold

Consolidated Cost of Goods Sold for 9M 2013 represented 88 per cent of sales, reflecting an improvement in gross profit margin from 8 per cent in 9M 2012 to 12 per cent in 9M 2013.

EFS's Cost of Goods Sold / Sales of113 per cent, reflects the low capacity utilization level currently at that facility with the flat production line remaining closed.

Gross profit

Gross profit of EGP 1.8 billion was recorded for 9M 2013, an increase of 49 per cent from the EGP 1.2 billion recorded in 9M 2012.

EBITDA

EBITDA for 9M 2013 amounted to EGP 1.8 billion, representing an increase of 34 per cent from EGP 1.4 billion in 9M 2012.

Tax

The company's tax charge increased 33 per cent from EGP 229 million in 9M 2012 to EGP303 million in 9M 2013, in line with the overall increase in the group's profitability.

Net profit after tax and minority interests

Net profit after tax and minority interests was EGP 218 million for 9M 2013, in comparison to a loss of EGP 46 million for 9M 2012.

Liquidity and capital resources

At the end of the period, ezzsteel had cash on hand of EGP 1.7 billion and net debt of EGP 8.8 billion. The company has a gearing of Net Debt / Equity of 1.29 times.

Outlook

The Egyptian market continues to see sustained demand for long and flat products. In November, the Egyptian Government announced a new economic stimulus package which will increase spending on infrastructure projects. We therefore expect the Egyptian Steel market in 2014 to remain quite robust.

In parallel, the constant progress in the construction of our DRI plant, coupled with the gradual return of political stability in our country, will allow us, we expect, to further improve the profitability of our business in future reporting periods.

Divisional Overview

- Ends -

Disclaimer:

This press release is issued 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 2013.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 FCA) to update any forward-looking statements or to conform these forward-looking statements to ezzsteel's actual results.