2001 THIRD QUARTER RESULTS.

Stainless Steel Market The world economic slowdown, as it always does, is affecting the stainless steel market. The apparent consumption of stainless steel flat products during the first nine months of the year, compared to that of the previous year, has sunk 9% in Europe and 21,8% in the United States, which are unprecedented falls in the stainless steel market for many years. According to Metal Bulletin, during these months the average prices have sunk by 11,9% in Europe, 30,1% in United States and 33% in the Far East
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Stainless Steel Market

The world economic slowdown, as it always does, is affecting the stainless steel market. The apparent consumption of stainless steel flat products during the first nine months of the year, compared to that of the previous year, has sunk 9% in Europe and 21,8% in the United States, which are unprecedented falls in the stainless steel market for many years.

According to Metal Bulletin, during these months the average prices have sunk by 11,9% in Europe, 30,1% in United States and 33% in the Far East.


ACERINOX production

Under these unfavourable circumstances ACERINOX has reached the following production increases: 5,4% in the Melting Shop, 8,7% in Hot Rolling and 1,4% in Cold Rolling. These production increases, together with the process improvements, will lead to a costs reduction.


Stocks

During this period stocks have dropped to normal levels not only in the mills but also in all the Group Commercial Subsidiaries. Their average costs have also strongly fallen. Consequently, all the companies of ACERINOX Group are well placed to take full advantage of the upward trend which is going to take place as soon as the world economy reactivates again, or the L.M.E nickel prices recover, since all the stockists and end users’ stocks are now at a very low level.
Third Quarter results

By 30 September net results after tax amount to 67,2 million euros, 70,5% lower than those obtained during the same period in the year 2000, but, taking into account the above mentioned circumstances, they can be considered to be very satisfactory.

1) The third quarter results, coinciding with the holiday summer season, amount to 25,4 million €, showing a positive trend. These results have increased 17% if compared to those of the second quarter and 26% if compared to those of the first quarter. This improvement is due to the reduction in stock levels and average stock values in NORTH AMERICAN STAINLESS and in all subsidiaries.


2) Accumulated results corresponding to the first nine months of the year, 67,2 million €, are higher than 64,8 million euros, which are more than enough to pay an equivalent dividend to that of the Fiscal Year 2000 of 1,08 euros/share. The strong depreciation amount, around 94 million euros, will allow us to make investments and to reduce even more the ACERINOX Group gearing ratio.


NORTH AMERICAN STAINLESS melting shop

NAS melting shop is in its last stage of construction. Its first cast will be produced during the month of December.

With the melting shop completion, the Kentucky plant process will become fully integrated and will reach a capacity of 800.000 Tm/year.

COLUMBUS

On the 12th of November a binding agreement was signed with Highveld (Angloamerican Group) and Samancor (BHP-Billiton Group), the world’s leading mining groups and with the Industrial Development Corporation of South Africa so as to acquire a stake of 64% in the share capital of a new company, COLUMBUS STAINLESS PTY.LTD, at a price of 232 million euros , into which the partners will transfer the business and the stainless steel flat products integrated plant located in South Africa, which latest facilities were inaugurated in 1996 by Nelson Mandela.

Among the agreements signed, we have to point out a ferrochrome supply agreement with Samancor, which is the world’s leading producer. This agreement will improve COLUMBUS competitiveness and will allow to melt liquid ferrochrome produced in the adjacent Samancor plant.

A Technical Assistance Agreement for five years has also been signed between ACERINOX and COLUMBUS. ACERINOX technicians have been studying in situ the Middelburg plant and are preparing the improvements which will take place from the next 2nd January on.

The stainless steel consumption is increasing at an annual growth rate of 18%.

By means of this acquisition ACERINOX Group will have three stainless steel integrated plants, in Spain, USA and South Africa, with a total capacity of 2,5 million tons, which means 14% of the world’s stainless steel production. Consequently we will become the world’s third producer.


CAPITAL INCREASE


In order to fulfill the duties undertaken in this transaction of 232 million euros the ACERINOX SA Board of Directors, making use of the authorisation granted by the General Meeting, resolved in its meeting of yesterday, November 12th , 2001, to make a capital increase, with the exclusion of the rights of pre-emption, of 5.800.000 new ordinary shares with a nominal value of 1 euro/share, issued at a price of 40 euros/share.

The shares will be subscribed by the three South African partners, who will hold a stake of 8,8% in the share capital of ACERINOX, S.A and a seat at the Board of Directors.


INTERIM DIVIDEND

Finally, in its meeting of yesterday the Company’s Board of Directors agreed to pay on January, 4th , 2002, a gross interim dividend of 0,21 euros/share corresponding to the Fiscal Year 2001 and identical to that paid on January, 5th, 2001.