The stainless steel sector in the first quarter 2008 has been featured by the demand recovery, which has been favoured by the relative stability of nickel prices, which has allowed to reduce the inventory levels existing in the market and to improve the order book.
Base prices have improved in all the markets against the minimum levels achieved in the fourth quarter 2007. The demand strength allows us to be optimistic with regard to the price evolution in the next months.
In this context, the melting production of the Group, 626,340 Mt, has returned to normal levels, although they are slightly lower than the outputs of the like period of the year before.
Accumulated net sales, 1,567 million euros, decrease by 27% with regard to the same period of the previous year.
Result after taxes and minorities, 66.7 million euros, shows a clear change of trend and allow us to be optimistic with regard to the current year. Nevertheless this invoiced figure is 68% lower than the exceptional first quarter of year 2007.
ACERINOX Consolidated Group Profit and Loss Account
Condensed balance sheet of Acerinox Consolidated Group
· Campo de Gibraltar Factory
The investment program approved a year ago (16th Phase) for an amount of 49.9 million euros is at an advance phase for completion.
ACERINOX, S.A. has recently approved a new Investment Plan (17th Phase) for an amount of 45.6 million euros, which will be carried out in two years. An important part of this investment plan (22%) will be allocated for improvements in safety at work and environment. The rest will be allocated for improving and upgrading the production equipment currently in operation.
· Middelburg and Kentucky factories
The new investment in South Africa and the United States continue at a good pace according to the schedule for their start. In March NAS ladle furnace has come onto stream, which will help to improve both the production and the steel quality.
· Investment in Malaysia
The starting works for the project of a new factory of Acerinox Group in Malaysia go on, and the Bahru Stainless Society has already been incorporated.
Labour Agreement for the Campo de Gibraltar factory
ACERINOX, S.A. and the Works Committee of the Campo de Gibraltar Factory, representing the employees, have signed a labour agreement for the next four years.
This Agreement, which is the 17th, will affect a total number of 2,225 employees.
Payment to the shareholders
ACERINOX, S.A. Board of Directors, in its meeting held this morning, has resolved to propose to the General Shareholders Meeting a complementary dividend of 0.15 euros per share on account of year 2007, to be paid on July, consolidating the dividend paid the previous year on account to the exceptional year 2006.
Likewise, it will be proposed to the General Shareholders Meeting the redemption of the 2% of ACERINOX, S.A. Share capital, which is currently treasury stock.
General Shareholders Meeting
The Board of Directors has summoned the General Shareholders Meeting for the 27th May. An attendance bonus of 0.03 euros per share has been fixed. The following important agreements will be submitted to the General Shareholders Meeting:
· Regarding the payments to the shareholders, a ratification of the two payments on account of year 2007 (0.10 euros per share each) will be asked for and also a complementary dividend of 0.15 euros per share. Likewise, following our traditional policy, it will be proposed the issue premium refund of 0.10 euros per share, to be carried out in October.
· The share capital reduction through the redemption of 5,200,000 own shares in treasury stock, equivalent to 2% of the share capital.
· To follow the recommendations of the Unified Code of Corporate Governance, it is proposed to eliminate the limit of the vote right, and also to allow the divided vote. Likewise, the Board of Directors, the Audit Committee and the Appointments and Retributions Committee Bylaws have been modified. The modification of the General Shareholders Meeting bylaws and the Articles of Association will also be proposed to the General Shareholders Meeting.
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