Al Ezz Gds Regs Regulatory News (AEZD)

ezzsteel REPORTS CONSOLIDATED Q1 2012 RESULTS

Cairo, 13 September 2012 - 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 31 March 2012. 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

** 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:

"Reflecting a resilient operational performance, ezzsteel remained earnings positive during the period, despite the weakness of global steel markets and the slowdown in the Egyptian economy. We have achieved record volumes, both in terms of production and sales, and these enabled us to absorb increased input costs and protect our bottom line. During 2012, we expect to maintain a strong operational performance within a depressed global and domestic environment."

 For further information:

ezzsteel

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 5.8million tonnes of finished steel.

In 2011, the Company produced 3.6million tonnes of long products (typically used in construction) and 1 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 Q1 2012 were EGP5.2bn, representing an increase of18per cent year on year. This increase in sales reflects higher prices during the period, with long product prices rising by 6per cent year on year over both local and export markets, while flat steel prices rose by6per cent domestically and declined by 1 per cent for export markets.

Long steel products accounted forEGP 4.0 billion or 77per cent of sales in Q12012, while flat steel products represented 22 per cent of sales at EGP 1.1billion. Long product exports accounted for 2 per cent of total long sales, reflecting the continued strong domestic market demand for ezzsteel's long products, mainly from private house building activity. Conversely, flat product exports accounted for 47per cent of total flat sales, in line with the same period in 2011, due to the reduced activity in the global flat steel market.

Long steel sales volumes reached 937,356 tonnes duringQ1 2012, 20 per cent higher than the 781,018 tonnes sold during the same period last year, driven by long product production coming on stream at EFS.

Flat steel sales volumes fell by 7per cent to 272,014 tonnes in Q1 2012, principally due to the switching of production at EFS to long products, due to higher demand and more attractive pricing.

The group's consolidated sales volume reached a total of1.2 million tonnes inQ1 2012, an increase of 13 per cent from the 1.1 million tonnes sold in Q1 2011, due to increased long product production at EFS following the commissioning of the long product mill during 2011.

The contributions of ESR/ERM, EZDK and EFS to the consolidated net sales for the period ending 31 March 2012 were 28 per cent, 58 per cent, and 14 per cent respectively.

Long steel production volumes reached 1.02million tonnes during the period, a 17per cent increase from the 866 thousand tonnes in Q1 2011, reflecting increased production from EFS. Flat steel production volumes fell by 3per cent to 250 thousand tonnes for the period, compared to 259 thousand tonnes in Q1 2011. This was due to the suspension of flat production at EFS due to weaker global demand and pricing and the concentration of production at that plant on long products.

Cost of Goods Sold

Consolidated cost of goods sold for Q1 2012 represented 91 per cent of sales, reflecting higher raw material and energy costs.

EFS's cost of goods sold, at 105per cent, reflects the impact of the continued suspension of flat production.

Gross profit

Gross profit of EGP 475million was recorded in Q1 2012, a decrease of16per cent from the EGP 563million in Q1 2011.

EBITDA

EBITDA for Q1 2012amounted to EGP 538 million, representing a decrease of 15 per cent from EGP 631million recorded in Q1 2011.

Tax

The company's tax charge fell from EGP 229 million in Q1 2011 to EGP 122 million in Q1 2012, mainly due to the one - time adjustment to the deferred tax liability that was accounted for during Q1 2011.

Net profit after tax and minority interests

Net profit after tax and minority interests was EGP 18million for Q1 2012, in comparison to a loss of EGP 10 million for Q1 2011.

Liquidity and capital resources

At the end of the period, ezzsteel had cash on hand of EGP 1.4billion and net debt of EGP 8.2 billion. The company has gearing of Net Debt / Equity of 1.21times.

Outlook

Domestic demand for long products remains strong, as infrastructure projects and developers return to the market. While the global market for flat steel remains weak, we will continue to manage our production mix, particularly at EFS, to optimise efficiency and profitability.

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 3 month period ending 31March2012.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.