- This result, 19.4 million euro, means an improvement of 181.4 million euro compared to that of the previous quarter.
- The improvement of the market situation during the third quarter together with the joint effects of the Excellence Plan 2009-2010 and the adjustment plan have determined a change of trend in the Group results
- Despite its improvement, the stainless steel market is still awaiting an environment of steadier growth
- The strategic advantages of the Group global presence are strengthened in a situation of economic uncertainty.
- The extraordinary negative circumstances of the market suffered since the first half of 2008 have been overcame
Raw Materials
Nickel maintains its upward trend started at the end of March, and it has risen in value by 80% from that period. During the last weeks nickel average quote has been 18,500 USD/Mt.
Markets
During the third quarter the stainless steel market has confirmed the end of the stock reduction process worldwide, in producers and distributors. A minor process of re-stocking has already begun during the quarter.
Base prices have increased in all markets, although the volatility of nickel prices involves that the expectations of changes in the alloy surcharges determines to a great extent the stockists´ behaviour in the short term.
Productions
The quarterly melting production of Acerinox Group amounts to 610,867 Mt, which means a 40% improvement with regard to the output of the previous quarter. It keeps an increasing evolution since the fourth quarter 2008. The yearly accumulated figure is still 21.3% lower than the output of the same period of 2008, although the distance is being cut down.
Results
Acerinox Group quarterly results show the improvement of the market conditions, the strengthening of the price increases leaded by Acerinox and particularly the efficiency of the cost adjustment plan carried out in the last 12 months, and also the Excellence Plan 2009-2010, which is showing highly positive results.
The EBITDA achieved in the quarter, 62.3 million euro, shows the strength of the Group even in situations of economic uncertainty. Should the world economic recession expand even further than forecasted, the inventories normalisation and the cost reduction in the Group, allow us to expect positives EBITDA from now on.
The improvement of the market situation and the reduction of our production costs makes no inventory provision to net realizable value to be necessary.
Anyhow, the current improvement of the market situation does not allow to offset the plunge of the first half of the year.
Acerinox Group is the only worldwide producer with production facilities in three continents, which will become four once Bahru Stainless (Malaysia) gets onto stream on 2011. Then Acerinox Group will have factories located in different continents.
Acerinox global positioning allow us to optimize our presence in the markets with a better relative behaviour.
The sales rate in the Asian market has improved to 19%.
The balance sheet as of 30th September 2009 compared to that of the end of year 2008 shows the process of inventories reduction and the higher activity of the market according to the debtors and creditors accounts. Yet the working capital has been reduced in 314 million euro.
The strength of the Group balance is proven by the fact that its investment plan is kept without increasing its debt.
The net cash-flow from operating activities amounts to 231.3 million euro that is almost triple than the figure achieved last year.
Staff
As of 30h September the number of employees totals 7,345. In the last twelve months the staff has been reduced in 540 people. This reduction has been partially offset by the addition of 203 employees from the stockist Yick Hoe Metal in Malaysia.
Bahru Stainless
The construction of the new factory in Malaysia, Bahru Stainless, progresses on schedule. All the production lines have been already contracted and are under way. We expect that the cutting lines will come onto stream by the end of the first quarter 2010 and the cold rolling mill to start operating a year after.
Outlook
The improvement of the demand experienced during this quarter will tend to slow down towards the end of the year. We notice a trend in the stainless steel supplying chain of lowering their debt and inventories affecting the market. A reduction of our order book may be therefore expected although we also hope to keep a positive result.
In 2010 we expect an increase of the demand between 6% to 10% and therefore a recovery of the market conditions.
Consequently, we expect a price improvement in the first quarter.
Source: Acerinox website
