Al Ezz Gds Regs Regulatory News (AEZD)

6 Sep 2007 07:01

Al EZZ Steel Rebars S.A.E.06 September 2007 AL EZZ STEEL REBARS REPORTS CONSOLIDATED 2Q 2007 RESULTS • Consolidated net sales up 10% on 1Q 2007 to EGP 4.1bn • Gross profit of EGP 1.0bn in 2Q 2007 versus EGP 897mn in 1Q 2007 • EBITDA* of EGP 1.1bn in 2Q 2007 • Net profit before tax up 24% to EGP 811mn in 2Q 2007 • Tax and deferred tax of EGP 154mn in 2Q 2007 • 2Q 2007 net profit after tax and minority interests up 24% q-on-q to EGP 347mn • 2Q 2007 EPS of EGP 1.94 Vs. 1Q 2007 EPS of EGP 1.55 • Net debt to Equity 1.14x as at 30 June 2007 *EBITDA = sales - cost of goods sold - selling & marketing expense - G&A expense + depreciation and amortisation Cairo, 5 September 2007 - Al Ezz Steel Rebars S.A.E. ("Ezz Steel") (CASE: ESRS;London Stock Exchange: AEZD), the largest independent producer of steel in theMENA region and market leader in Egypt, today announced its consolidated 2Q 2007results for the period ending 30 June 2007. The audited results have beenprepared in accordance with Egyptian Accounting Standards. 2Q 2007 Sales: Sales ESR/ESM EZDK EFS Total (after inter-company EGP 000's eliminations) Long 1,105,970 1,472,397 - 2,577,701 Flat - 719,271 771,221 1,490,492 Others 687 37,701 2,990 33,446 Total 1,106,656 2,229,369 774,211 4,101,639 HY 2007 Sales: Sales ESR/ESM EZDK EFS Total (after inter-company EGP 000's eliminations) Long 2,173,068 2,866,620 - 5,038,602 Flat - 1,296,117 1,426,536 2,722,653 Others 1,262 184,366 6,432 66,973 Total 2,174,330 4,347,103 1,432,968 7,828,228 Net sales for the three months to 30 June 2007 reached EGP 4.1bn, up 10% fromthe first quarter 2007. Long steel products contributed 64% of total sales withflat steel products representing 35% of total sales for the quarter. Thecontributions of Ezz Steel, EZDK and EFS to net sales for the period ending 30June 2007 were 26%, 56%, and 18% respectively. As in prior periods, domestic sales continue to comprise the majority of totalsales, 72%, with export sales accounting for 28% of total sales. The proportionof long product being exported declined slightly during the period to reach 8%of total long sales by value. As in prior periods, exports to internationalmarkets accounted for the majority of flat products sales, as illustrated below: 2Q 2007: Domestic % Export % Flat 556,807,357 37% 933,684,843 63% Long 2,367,053,307 92% 210,647,855 8% 2Q Cost of Goods Sold: EGP 000's ESR/ESM EZDK EFS The CompanySales 1,106,656 2,229,369 774,211 4,101,640COGS 1,008,526 1,388,948 720,561 3,101,459COGS / Sales 91% 62% 92% 76% HY Cost of Goods Sold: EGP 000's ESR/ESM EZDK EFS The CompanySales 2,174,330 4,347,103 1,432,968 7,828,229COGS 1,972,123 2,761,581 1,329,023 5,930,685COGS / Sales 90% 63% 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 second quarter was EGP 347m. Thishas delivered EPS of EGP 1.94 per share, a 25% increase from EGP 1.55 per sharein 1Q 2007 on a weighted average number of shares basis. Outlook In the near term, the Company expects that there will continue to be strongdemand for long products in both the Egyptian and regional markets. Demand forflat steel products is also expected to continue in line with currentperformance. Ezz Steel remains on track with its domestic and regional expansionplans that will enable it to take advantage of these robust market conditions. Comment Mr. Ahmed Ezz, Chairman and Managing Director of Ezz Steel, said: "As these solid results demonstrate, we have worked hard to capitalize onrobust market conditions, by extracting greatest value from our state-of-the-artfacilities and making optimal use of our ability to produce a diverse productrange. Our leading position in the Egyptian and MENA region's steel industry isa reflection of sustained operational and financial performance and furtherunderlines the benefits of consolidation accruing to the business." Divisional Overview Please note that the below mentioned overview reflects the 2Q 2007 performanceof each entity on a stand alone basis rather than the consolidated portionswithin the Ezz Steel consolidated financials for the three months to 30 June,2007. 1Q 2007 2Q 2007 % q-on-q changeEZDK Sales: Value: 2,117,733,602 2,229,369,698 +5.27% Volume: 714,232 667,185 -6.59%Production Tonnes Long Products 432,600 431,457 -0.26% Flat Products 147,951 210,899 +42.55% DRI 679,030 688,943 +1.46% Billets 457,061 485,599 +6.24%Exports as % of Sales: 22.6% 21.0% Long: 18.9% 7.7% Flat: 41.3% 49.2% EBITDA 802,656,331 943,892,728 +17.60%ESR/ESMSales: Value: 1,067,674,039 1,106,656,271 3.65% Volume: 353,008 337,402 -4.42%Production Tonnes Long Products 339,761 332,484 -2.14% Billets 208,037 192,371 -7.53%Exports as % of Sales 7.0% 8.7% EBITDA 110,126,303 96,837,864 -12.07%EFSSales: Value: 658,756,841 774,211,170 17.53% Volume: 226,528 226,833 0.13%Production Tonnes Flat Products 222,780 252,756 13.46%Exports as % of Sales 71.7% 74.9% EBITDA 75,360,761 72,331,966 -4.02% Paste the following link into your web browser to download the PDF documentrelated to this announcement: http://www.rns-pdf.londonstockexchange.com/rns/3891d_-2007-9-5.pdf Enquiries:Ezz Steel Tel MobileKamel Galal + 20 2 3762 2144 + 20 10 539 5499 Capital MS&LNeil 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 the first six months of 2007, it produced 1.5 million tonnes of long products(typically used in construction) and 834 thousand tonnes of flat products(typically used in consumer / industrial goods). Ezz Steel's customer base isgeographically 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 financialsresults for the year 2007. This document includes forward-looking statements. These forward-looking statements include all matters that are not historicalfacts. In particular, the statements regarding the Company's strategy, theexpected strength of demand for long products in Egypt and in regional marketsand for flat steel in the international markets, and other future events orprospects are forward-looking statements. Recipients of this document shouldnot place undue reliance on forward-looking statements because they involveknown and unknown risks, uncertainties and other factors that are in many casesbeyond the control of the Company. By their nature, forward-looking statementsinvolve risks 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 the forward-looking statements in this document including worldwide economic trends, globaland regional trends in the steel industry, the economic and political climate ofEgypt and the Middle East and changes in business strategy of the Company andvarious other factors. These forward-looking statements reflect the Company'sjudgment 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. This information is provided by RNS The company news service from the London Stock Exchange