This results have been obtained after carrying out, in the third quarter, a provision to adjust inventories to net realizable value  for an amount of 51 million euros.

The stainless steels demand in the third quarter has been significantly affected by the international financial crisis. Nevertheless, once the nickel prices become stable in the London Metal Exchange a recovery is expected.


The stainless steels sector has been enormously affected by the international financial crisis during the third quarter. The nickel price, used as another financial tool in the London Metal Exchange, has been dragged in the last months, reaching minimum levels of 10,155 USD/Mt (cash price) lately, which have not been seen since September 2003.

The continuous correction of the nickel price (69.5% since January) has retracted demand temporally, awaiting lower alloy surcharges, and consequently, affecting the base prices in all the markets.

 Nevertheless, these levels of 10,155 USD/Mt make us feel optimistic y think that nickel price will get closer to support levels. 

- European Market

The apparent consumption for cold rolled flat products  during the first nine months of year 2008 has behaved satisfactorily, although the market conditions have significantly got worse during the third quarter.

In most of the countries the higher volatility of the new alloy surcharge formulas has contributed to this weakness.

The normal recovery of demand after the summer months has not taken place yet. Notwithstanding, the inventories levels in the market make us feel optimistic about a recovery once the nickel price become stable.

The base prices reached in September in Europe are among the lowest in the last decade.

 - American Market

The American market has been equally affected by the international financial situation, although the base prices are more stable than  in Europe and Asia. 

Inventories levels are at the lowest levels in the last decade.

 - Asian market

Apart from the previously mentioned reasons, the Asian market has been affected by the higher demand due to the new productions, particularly in China.  Nevertheless, the carried out production cuts have helped to lower the market inventories levels, although prices have not improved.

 - The market prospects

The upholding of the stainless steels consumption growth rates, between 5% and 6% yearly during the last 50 years, makes us feel optimistic for the medium and long run.

Although the nickel price correction is leading to an immediate demand contraction, it will benefit the competitiveness of the stainless steel austenitic grades through the expansion of  its application fields. 


In this context, Acerinox Group has maintained a good production level, which is slightly higher than the level reached in the nine first months of 2007.

Nevertheless, in the current situation of contracted demand all the factories are adjusting their productions to the book of orders.


The accumulated net sales as of September, 4,281 million euros, is 21.6% higher than the figure achieved in the previous year like period due to the lower effective prices achieved.

 The main market is still Europe with 43.9% of the whole of our sales. The Spanish market accounts for approximately 11% of the total sales of the Group.

- Third Quarter

Apart from the previously mentioned circumstances, the third quarter results have been enormously affected by the provision carried out for adjustment of inventories to net realizable value for an amount of 51 million euros.  

Net losses registered in the Consolidated Group during the third quarter, 29.2 million euros, are due to the mentioned provision.

- Accumulated  January - September

The EBITDA, 331.1 million euros, (-59.7%) is equivalent to 7.7% margin over sales, once the provisions for inventories adjustment to net realizable value for 51 million euros have been carried out.

Results after taxes and minorities total 125.4 million euros, decreasing by 70.5% with regard to the figure of 2007 like period.  If  the provision would not have been carried out, the net results would have risen to a profit of 159.9 million euros.

Acerinox Group liquidity

The Group financial debt amounts to 1,209 million euros as of 30th September 2008. The Group financial strength is confirmed by the fact that more than the half of the credit lines, 2,475 million euros, are available.

The balance sheet structure is very well balanced thanks to the fact that more than the indebtedness half, 615 million euros, is a long term debt. Most of the short term credit lines have been renewed in the recent months, so we do not foresee any liquidity problem.

The correction suffered by the market will imply less financial necessities of working capital in next months.
Thus, the financial strength of the Group and its credit capacity have not been affected by the international financial crisis.

Retribution to shareholders

On the 3rd October 2008 the payment of 0.10 euros per share, corresponding to the issue premium refund was carried out, as resolved in the Board of Directors Meeting held on the 21st July 2008.
Likewise, in August a 2% reduction of the share capital  was carried out through the purchase of 5,200,000 own shares for a total amount of 82.4 million euros. The resulting share capital totals 254,300,000 shares.

During 2008, added to 0.45 euros per share paid to the shareholder, those attending or represented in the General Shareholders Meeting of the Society obtained 0.03 euros per share.  The total amount paid totals 6.7 million euros.

Treasury Stock

In the last General Shareholders Meeting held on the 27th May 2008, the authorisation to the Board of Directors to buy own share up to 5% of the share capital, was renewed. 
According to said authorisation, the purchase of 1% the share capital in the market exchange for an average price of 12.18 euros/share was completed.
The share price evolution in the current situation and the Society financial strength guarantee said purchase, with the aim to propose its redemption in the most convenient moment. Acerinox will go on using said authorisation to buy own shares, should the market conditions make it advisable.

Share Evolution

Acerinox share behaviour during 2008 has been in line with the Spanish market reference index, IBEX-35 and the remaining world reference indexes. 

It is to be highlighted that from January Acerinox share has kept a better behaviour than the rest of the main meal values. 
Society governance

After the General Shareholders Meeting and in view of the new appointments in the Board of Directors, new compositions have been established for the different committees. Likewoise, positions were renewed in the Society Audit and Appointments and Retributions Comités, which remain composed of the following Directors:

Audit Committee
Mrs.  Amparo Moraleda Martínez (Chairmwoman)
Mr.  Diego Prado Pérez-Seoane (Member)
Mr.  Clemente Cebrián Ara (Member)
Mr.  Fernando Mayans Altaba (Member)
Mr. Fumio Oda (Member)

Appointments and Retributions Committee
Mr. José Ramón Guerediaga Mendiola (Chairman)
Mr. Santos Martínez-Conde Gutiérrez-Barquín (Member)
Mr. Óscar Fanjul Martín (Member)
Mr. Braulio Médel Cámara (Member)

Besides, the Executive Committee has been constituted, which will be composed with the following members:

Executive Committee
Mr. Rafael Naranjo Olmedo (Chairman)
Mr. Santos Martínez-Conde Gutiérrez-Barquín (Member)
Mr. Juan March de la Lastra (Member)
Mr. Óscar Fanjul Martín (Member)
Mr. Fumio Oda (Member)
Mr. José Ramón Guerediaga Mendiola (Member)
Mr. Álvaro Muñoz López (Secretary)

Acerinox  continues with its wide investments program.

- Campo de Gibraltar Factory (Acerinox)

The investments program approved a year ago (17th Phase) for a total amount of 49.9 million euros, is at an advanced stage.  Within this program, the up-grading of the annealing and pickling line, No. 3 AP has been completed, which increases its capacity by 20% and involving a significant improvement in the products quality. 

The recently approved investment plan (18th Phase) for the next two year for an amount of 45.6 million euros, has already been started. 

- Kentucky Factory (NAS)

As part of the investments program announced in year 2006, and after the start-up of the new laddle furnace in April,  the new No. 2 AOD converter has come onto stream in April, rising the melting capacity to 1.4 million Mt (40% increase). 

This plan will be completed in the fourth quarter of the current year with the new hot annealing and pickling line, No. 4 AP, with an annual capacity of 1.2 million and No. 5 Sendzimir at the end of the first quarter 2009.  With this last investment the cold rolling capacity will rise to 830,000 Mt per year.

- Middelburg  Factory(Columbus)

No. 4 Sendzimir cold rolling mill is at an advanced construction stage and it is planned to be put into operation at the end of the first quarter 2009.

- Johor Bahru  Factory (Bahru Stainless)

As part of the investment program of the first phase for an amount of 320 million euros:

 - The cutting lines for the Finishing Shop have already been ordered.

- The Sendzimir cold rolling mill (1500 mm) has already been ordered. 

- The annealing and pickling combined line and the skinpass are at present in the awarding process.

- Commercial Network

Recently the new service centres have started their activity in the following locations:

Ø Monterrey (Mexico)
Ø Oporto (Portugal).

On the other hand, we continue with the investments program approved at the end of 2007 for an amount of 58 million euros.  As part of this program, the cutting lines for Warsaw Service Centre (Poland) have already been ordered.