2014: 1st Quarter Results

  • Relief in the Chairmanship of Acerinox
  • The better performance of the demand and the results achieved confirm the trend change initiated in the second half of 2013
  • The EBITDA of 89 million euros generated in the Quarter, is 30% higher than that of the same period of last year
  • Profit after taxes and minorities amounts to 25 million euros, 64% higher than the first Quarter of 2013
  • The order book is the highest in the last three years and guarantees the good activity in the factories for the coming months
  • Net financial debt of 760 million euros, is still controlled despite higher working capital requirements, due to increase in production and rise in nickel prices
  • Inventory levels at distributors remain low


Relief in the Chairmanship of Acerinox

The Chairman of Acerinox, S.A., Mr. Rafael Naranjo Olmedo, has submitted his resignation as Chairman and Director, due to health reasons.

Rafael Naranjo (Sevilla, 1944), joined Acerinox in 1970, the year of the creation of the company where he has developed his entire professional career until his retirement.  He was successively Head of the Technical Department, Commercial Director, Managing Director, Chief Executive Officer, and Chairman until the present time. In recognition of his work, the Board of Directors in its meeting held today has agreed his appointment as Honorary President of Acerinox.

Rafael Naranjo has played a key role in the history of Acerinox and has been the architect of the internationalization of the Group, with the creation of North American Stainless in the United States, the purchasing of Columbus in South Africa and the constitution of Bahru Stainless in Malaysia. At the last stage, he has practiced his leadership during the hardest years of the economical global crisis, being the head of launch the Excellence Plans and the Strategic Plan, still in force. 

For his replacement, the Board of Directors has appointed Mr. Rafael Miranda Robredo (Burgos, 1949) as Independent Director and new non-Executive Chairman of Acerinox, S.A.

Rafael Miranda, Industrial Engineer by ICAI, in more than 40 years of professional career has held important positions in companies such as Tudor, Campofrío and Endesa of which he was Chief Executive Officer up to 2009. At present he is the Chairman of Endesa Foundation and the Association for the Progress in Management, among other positions.

Stainless Steel Market

In the first Quarter of 2014, the improvement which began in September 2013 is consolidated. The stainless steel market has experienced growth in consumption at a worldwide level, in line with the increasingly better macroeconomic figures.

The increase in apparent consumption is determined by good real demand, up to now it has not produced the inventory restocking typical for this time of the year.  However, the order book and the evolution of the raw material prices suggest that restocking will be held in the second Quarter.

After three consecutive years of nickel price decreases, the trend has changed and so far this year it has increased 11%. The prohibition to export nickel imposed by the Indonesian government and the improvement in demand of stainless steel seem to be the main reasons for this rise.

January and February data available show that apparent consumption in the European market is having a very positive evolution, with an increase of over 10%. Real demand is supported by the good performance of capital goods and it is important to highlight that we start seeing signs of recovery in sectors such as appliances, automotive, food industry and catering equipment. Base prices have increased 50 EUR/Mt in the Quarter, and do not rule out further increases in the second Quarter.

The North American market continues to behave satisfactorily and in the first Quarter of this year apparent consumption has increased around 8%. North American Stainless has achieved a price increase of 80 USD/Mt from April, 1st and we are studying if the necessary conditions are given for an increase in the second Quarter.

In Asia, after the celebration of the Chinese New Year, we expect higher activity and price increases, although below alloy surcharges rises in Europe and the United States. This becomes even greater price gap and increases the risk of exports from Asia.



The final production figures of 2013 received from International Stainless Steel Forum indicates that production increased one point more than originally estimated, up 7.8% to 38 million tons. Growth forecasts for 2014 are above 5% and very homogeneous across regions.

Melt shop production at Acerinox during the first Quarter of the year, 617,496 tons, is 5.2% higher than that of the same period of the previous year and the highest since the first Quarter of 2008. North American Stainless has achieved record Quarterly production

Cold rolling production of 384,496 tons, has been 5.2% higher than that of the first Quarter of 2013





Results of the first Quarter show a clear improvement, mainly due to the increase in sales volume and the efficiencies achieved by cost reductions.

Net sales of 1,024 million euros, are 1% lower than those of the first Quarter 2013 reflecting low prices, but sales in tones increased by 10%.

An adjustment of inventories to their net realizable value has been made for an amount of 7.11 million euros.

EBITDA for the Quarter of 89 million euros is 30% higher than the first Quarter of the previous year. It is noteworthy that the margin on sales of 8.7% is the highest since the second Quarter of 2011.

Despite the increase in energy prices, operating expenses continue to decrease 3.5%, as a result of the efficiency plans in place and depreciation of South African Rand. Depreciation increased by 11% mainly due to Bahru Stainless.

Result after taxes and minorities of 25 million euros is 64% higher than the first Quarter of 2013 and 70% higher than the fourth Quarter of 2013.

As a result of increased activity and higher prices in raw materials, the Group’s operating working capital has increased by 296 million euros. Due to greater need for financing, net financial debt totaled 760 million euros. 


General Shareholders Meeting

The Board of Directors, in its meeting held today, approved the call for the General Shareholders Meeting to be held on June 10th, 2014. It will take place at Paseo de la Castellana, 33 (Mutua Madrileña building), Madrid. The agenda and proposed resolutions shall be duly published.


Retribution to Shareholders

The Board of Directors of Acerinox, S.A., in its meeting held on December 18th, 2013, agreed to replace the dividends on account of January and April, as well as the complementary of July, with a single payment which will be proposed to the General Shareholder Meeting to be distributed in July.  This payment will be made, as in the preceding year, by the system of scrip dividend, worth approximately 0.45 euros / share as is traditional since 2007.



The improvement in the first Quarter confirms the change in cycle started in September 2013 and the beginning of the recovery process, which will continue in the second Quarter. However, the rate of exists from the crisis in Europe and how the overcapacity in the sector is managed, will determine our performance in the second half of the year, which makes us cautious in our estimates.