- ACERINOX GROUP REGISTERS POSITIVE QUARTERLY RESULTS (10.1 MILLION EUROS) FOR THIRD CONSECUTIVE TIME DESPITE THE WORLD ECONOMIC SITUATION. THESE RESULTS IMPROVE IN 103 MILLION EUROS THE RESULT REGISTERED IN 2009 LIKE PERIOD.
- GENERATED FREE CASH FLOW IN THE FIRST QUARTER AMOUNTS TO 128.6 MILLION EUROS.
- PRODUCTIONS AND RESULTS OF THE SECOND QUARTER WILL RETURN TO THE LEVELS PRIOR TO THE CRISIS.
During the first quarter 2010 the stainless steel market has been featured by a progressive recovery of demand. The first signs of this recovery were seen in the United States, followed by Europe and finally, once the Chinese New Year has started, the demand in the Asian market is also reacting.
The demand improvement is mainly taking place in the end customer sector so that inventories in the whole of the supply chain get back to normal.
The demand in the distribution sector has also improved but the inventories level is still below average, thus we expect demand to keep sustained in the next months.
Nevertheless, there are sectors, like investments in capital goods and projects, where the recovery signs have not been noticed yet.
Prices are rising in all the markets since the beginning of the year, following the raw materials prices increase. Likewise, the higher demand is allowing further increases of prices in Asia, and of the base prices in the United States and to a lower extent in Europe, where the improvement is expected to take place in the second quarter.
As a result of the demand improvement and the higher order entries, the factories have been increasing their productions, particularly from March.
In Campo de Gibraltar factory it has been decided not to renew the Labour Adjustment Temporal Plan, foreseeing productions close to the full capacity.
According to the current order book we can work at full capacity until the month of July.
The quarterly net sales, 999.4 million euros, is the highest one since the third quarter 2008.
The North American market improvement is to be highlighted, which has significantly affected the sales in this period.
Profit and Loss Account of Acerinox Consolidated Group
The margins have been recovered and it makes us feel optimistic towards the second quarter of the year. We have obtained an EBITDA of 61 million euros (-98 million euros in the first quarter 2009) and results after taxes and minorities have totaled 10.1 million euros (-93 million euros in the first quarter 2009).
Condensed Balance of Acerinox Consolidated Group
Despite the activity increase, during the first quarter the free cash flow has amounted to 128.6 million euros.
Net debt has been reduced to 955 million euros, nevertheless, the Group credit lines have increased to 1,906 million euros.
The gearing has been reduced to 51.5% from the 61.3% registered at the end of year 2009.
Refund to the shareholder
According to the announcement made on the 18th December 2009, ACERINOX Board of Directors held on that date, resolved to propose to the next General Shareholders Meeting to keep 2010 retribution, 0.45 euros per share
Thus, if the Ordinary General Shareholders Meeting approves de refund of 0.35 euros per share and an issue premium refund of 0.10 euros per share to be paid in October 2010, the total retribution to the shareholders in the year will total 0.45 euros per share, which is the same amount paid in years 2007, 2008 and 2009 for the same concepts.
The quantitative and qualitative improvement of demand allows us to work at high occupation levels in the second quarter, when we will achieve results levels similar to those previous to the crisis.
We expect to have enough visibility to allow us to confirm this good trend in the publication of results of the second quarter, which will take place on the 27th July and also in the Investors’ Day in Kentucky factory, which will be held on the 16th September.
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