2003 FULL YEAR RESULTS

El mercado de los aceros inoxidables en el año 2003 se ha caracterizado por un espectacular crecimiento del consumo en China, superior al 25%, y muy importante también en los países del sudeste asiático. Por el contrario, no ha aumentado en los países de la Unión Europea ni en Estados Unidos.
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During the year 2003, the stainless steel market has seen a spectacular growth –above 25%- of the consumption in China, and also a very important one in the South East Asian countries, unlike that of the EU countries and USA where there has not been growth at all.

In such scenario, the growth of the ACERINOX Group has been remarkable, with an increase of production in the Melting Shop of 24.6%, reaching 2.2 million Tons, therefore becoming the third largest producer worldwide.

The Plant of Campo de Gibraltar has worked at practically full capacity and better balanced, transforming slabs which in previous years were shipped to NAS into hot coils with higher added value.

The Kentucky Plant, North American Stainless (NAS), has doubled its Melting Shop production reaching 541,000 Tons, having a theoretical capacity of 800,000 Tons. It has also achieved record productions in hot and cold rolling. The starting up of the long product facilities has been fully satisfactory.

Regardless the slowdown of the demand during 2003 in the United States, exports have almost tripled and turnover has amounted to 852.4 million USD with an increase of 37.8%. Its Result after taxes of 36.8 million USD is 16% lower than that of the previous year while the Cash Flow after taxes of 80.7 million UDS is 7.3% higher.

In February NAS’ third Sendzimir cold mill and annealing and pickling line have been started up. The Board of Directors of ACERINOX, S.A. has approved an investment of 46 million USD for the erection of a fourth cold mill, identical to the third, whose award will be decided by NAS in the near future, and which will imply an increase in the cold rolling capacity of the Kentucky Plant up to 600.000 Tons. The Board of Directors of ACERINOX, S.A. has decided to hold its September meeting at that Plant.

Columbus Stainless has experienced a relevant increase of production reaching 643,000 Tons, 17% higher that that of the previous year. The improvements obtained at the Plant have not had economic results yet due to the exceptional increase in the prices of raw materials which could not be transferred to the selling prices in the South East Asia. This fact together with the delays due to two breakdowns of the electrical transformers; its exposure to the sales of its hot rolled products; and an important appreciation of the rand of 30.3% in respect of the USD, has made Columbus have a negative result of 15 million Euro, even though the Cash Flow has been slightly positive. In October, with the starting up of the third Sendzimir cold mill the situation will improve substantially, increasing the sales of products with higher value added.

RESULTS AS OF DECEMBER 31ST 2003

The turnover of the Group of 2,913 million Euro has been 16.5% higher that that of the year 2002. The result after taxes of 125.6 million Euro has been 28.4% lower, and the Cash Flow after taxes of 253.3 million Euro has been 11.7% lower.

The Board of Directors in its meeting held on February 26, has agreed to distribute a second interim dividend in the year 2003 of 0.23 Euro per share, identical to that of the same period of the previous year, which will be made effective next April 5.