Results 1st Half 2011


- Acerinox Group reports results after taxes and minorities of 102 million euros in the first half of the year, the best results since the beginning of the crisis (1st half 2008) .

- This result improves by 25.5% the figure achieved in 2010 like period.

- In the recent months demand has been affected by the new crisis outbreak in the euro zone and the decrease of the raw materials prices.

- An adjustment of inventories to net realizable value has been made for an amount of 32 million euros to match their value to the current raw material costs, with an impact of 23.5 million euros in the results of the period 

- We expect a market recovery in September which will lead to improved results for the fourth quarter.




Raw Materials

The nickel quotations in the London Metal Exchange have followed other stock exchanges, featuring an upward trend starting at the beginning of the year but following with an abrupt correction since March.




The alloy surcharge in the European market reached its highest point in March at 2,013 euros, and from then it has been reducing at an average of 100 euros a month. In the North American market, the alloy surcharge impact has been similar, with a month gap due to the different formula for the alloy surcharge calculation.


In the first quarter the stainless steel market reflected the improvement of the general economic situation with a recovery of demand in all the areas. The macro-economic uncertainties from March have affected stainless steel demand in the second quarter, particularly in the European market.

· Europe

The sovereign debt crisis, the resulting uncertainties and the impact in the listed markets, among them the LME, have affected demand and the level of orders has decreased since May.

This has led the Campo de Gibraltar Factory to take a temporary labour adjustment plan, which was approved on the 8th July 2011.




· America

The North American market has had better behaviour, which has allowed base price increases in the second quarter.

In June the entry of orders has weakened. Nevertheless, the low level of inventories in the North American Market, make us expect a recovery for the third quarter.




· Asia

The Asian market keeps a steady growth although the nickel price weakness and the strong competition in the markets have not allowed price rises in the first half of the year.








The correction of demand during May and June, as mentioned above, has made us reduce production to meet the market needs.

The melting production in the first half of the year, 1,064 thousand Mt, is 2.8% lower than the output of 2010 like period, which make the reported results even more positive and proves the new levels of competitiveness achieved thanks to the Excellence Plan.





The interim financial statements for the first half of 2011 have been prepared according to the IAS 34 and reviewed by the external auditors.

The Group net sales in the first half of the year, 2,560 million euros, is 17.9% higher than in 2010 like period.




The EBITDA of the year, 257 million euros, improves by 21.1% the figure of the first half of 2010.

The correction of the alloy surcharge has led the Group to carry out an adjustment of inventories to net realizable value for an amount of 32 million euros, with an impact of 23.5 million euros in the results of the period.

Once the above mentioned adjustments were made, results before taxes amount to 157 million euros, improving by 31.1% the figure achieved in the same period of the previous year.

Results after taxes and minorities for this period total 102 million euros, which is 25.5% higher than the figure of 2010 like period.

Condensed profit & loss account. Acerinox Consolidated Group




The following graph shows the unique position of Acerinox Group in the sector, able to register consecutive profits in the last eight quarters.




The geographical diversification of our production plants and our international presence allow us to match production output to the evolution of each market, reducing our exposure to the troubles and overcapacities of a specific market.




Condensed balance sheet. Acerinox Consolidated Group







The total investments disbursed of this half year amounts to 91.2 million euros, mainly for the construction of the new plant in Malaysia. 




The Group working capital increased by 196 million euros, which has lead to an increase in the Group net financial debt as of 30th June to 1,286 million euros.




Out of the total existing credit lines, 2,032 million euros, 34% is not being used and 61% are long term, this guarantees the availability of liquidity for the Acerinox Group in the near future, irrespective of the financial troubles that the markets may suffer

As of 30th June Acerinox Group complies with all the covenants agreed with the financing entities.




Management of the financial risk

In the first half of the year Acerinox Group has dealt with the same risks described in the approved annual accounts. The policies aimed to this management, also described in this report, have not changed.

The management of financial risks referred to the exchange rate, prices and credit is the same as that described in the annual accounts approved for 2010.

Concerning the liquidity risks, Acerinox Group has increased the financing lines to 2,032 million euros. The total debt as of 30th June amounts to 1,286 million euros.

In view of the international financial crisis, Acerinox Group has decided to increase its long term financing by 65 million euros (+9%), totalling at the end of June 790 million euros, out of which 400 million euros come due from 2014.

Regarding the interest rate risk, Acerinox Group has already covered all interest rates of the major part of its long term debt. A total of 490 million euros of the long term debt has been insured at an average cost lower than 4%.

Refund to the shareholder

The General Shareholders Meeting held on the 9th June 2011 approved the refund of a complementary dividend on account to year 2010 of 0.15 euros per share paid on the 5th July. A refund on account of the issue premium of 0.10 euros per share was also approved, which will be effective on the 5th October.

The total return received by the shareholders in year 2011 will amount to 0.45 euros per share (112.2 million euros), the same as in year 2010.


* DIVIDENDS 87,256,591 €


Investors’ Day

On the 8th November Acerinox will hold the Investors’ Day in London, where the Group Senior Management will make relevant presentations.

Bahru Stainless (Malaysia)

The construction works of Johor Bahru factory continue at a good pace. The first phase civil works are already completed, including the housing, bays, main auxiliary services, and the factory harbour is already under operation. The installation of the cold rolling mill is scheduled to be finished by September and the AP-1, annealing and pickling line, will start up in November.

Commercial Network: Open a subsidiary in Vietnam

Acerinox Board of Directors meeting held today has resolved to open a subsidiary company in Vietnam to increase our presence in this country. This decision is part of the Strategic Plan development, which keystone is the construction of Malaysia factory.

Excellence Plan

The Excellence Plan 2011-2012 approved last February with a goal to saving recurrent costs of 90 million euros, is being developed satisfactorily. As of 30th June 19% of the targets have been achieved.

Reorganization Project

In view of the report from the independent experts, Acerinox, S.A Board of Directors has issue a report and has decided to summon an Extraordinary General Shareholders Meeting for the 29th September, to attain the reorganization of its European production and commercial activities.

The Extraordinary General Shareholders meeting will create a new society, called ACERINOX EUROPA S.A.U, which will comprise, among others, the production and service activities now located in Campo de Gibraltar, Gavá, Pinto, Betanzos and Vitoria, as well as the facilities where they are being carried out.

After this reorganisation, ACERINOX,S.A, will become the holding society of the rest of the Group company, strategically placed on four continents and will be focused on coordinating the worldwide activities.


The new outbreak of the financial crisis and the resulting uncertainties have affected the main stock exchanges and the value of the listed metals. The nickel correction has affected consumption and the order entry in the stainless steel industry, which has been burdened with the Summer season.

Despite the market conditions, Acerinox hopes to continue registering positive results in the third quarter, which will be the worst of the year, and we also hope a recovery to take place in the fourth quarter.

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