Highveld - Trading Update
Release Date: 09/05/2003 17:30:36 Code(s): HVL
Highveld - TRADING UPDATE
HIGHVELD STEEL AND VANADIUM CORPORATION LIMITED
Registration no. 1960/001900/06
(Incorporated in the Republic of South Africa)
("Highveld" or "the corporation")
Share code: HVL
ISIN code: ZAE000003422
TRADING UPDATE
Several major factors affecting the financial results of the corporation have
deteriorated in the last four months necessitating a review of the outlook
included in the 2002 Annual Financial Statements.
As expected the most significant is the major strengthening of the South African
currency with its impact on export margins.
The local demand for steel has declined resulting in a reduction of over one-
third in despatches to domestic customers compared to the same period last year.
This is related to current high interest rates and a slowing of construction
activity together with destocking by merchants. Some improvement is possible in
the second half of the year but it is clear that demand will be well below that
of last year. While US dollar steel prices initially made it economic to
increase exports to compensate for the lower local demand these prices have
declined rapidly in the last month and combined with the strength of the rand
have severely impacted the profitability of exports. It may thus not be
economic to maintain full steel production.
While US dollar export prices for other group products such as vanadium and
manganese alloys have either improved or remained stable the impact of the rand
strength may require cuts in production.
Every effort has been taken to reduce costs to compensate for the rand strength
and this will continue.
Earnings for the first half of the year will be considerably lower than those
for the same period of 2002, as will those for the full year.
Witbank
9 May 2003
Sponsor
CAZENOVE
Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information.
