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ISCOR LIMITED - UNAUDITED GROUP EARNINGS AND PHYSICAL INFORMATION FOR THE
QUARTER ENDED 30 SEPTEMBER 2003
ISCOR LIMITED
Registration no: 1989/002164/06
Share code: ISC
ISIN code: ZAE000037453
UNAUDITED GROUP EARNINGS AND PHYSICAL INFORMATION FOR THE QUARTER
ENDED 30 SEPTEMBER 2003
GROUP INCOME STATEMENT (Rm)
Quarter ended Year ended
30 September 30 June 30 June
2003 2002 2003 2003
Revenue 4 782 4 849 4 683 19 082
Flat Steel Products
* Vanderbijlpark 2 656 2 673 2 402 10 205
* Saldanha Steel 699 795 691 3 147
Long Steel Products 1 242 1 280 1 426 5 180
Suprachem 217 169 192 763
Other 29 28 26 115
Inter-Group (61) (96) (54) (328)
Operating Profit 564 885 720 3 734
Flat Steel Products
* Vanderbijlpark 349 524 599 2 429
* Saldanha Steel 39 128 105 608
* Power contract settlement (157) (157)
Long Steel Products 159 223 205 878
Suprachem 46 30 36 142
Other 12 2 (14) (16)
Group costs (41) (22) (54) (150)
Impairment charge (13) (13)
Goodwill amortised (5) (21) (21)
Net financing costs (28) (48) (17) (136)
Profit from equity accounted
investments before tax 20 31 30 103
Exceptional items 3 14 11 57
Taxation (202) (267) (242) (1 215)
Minority interest (2)
Profit attributable to
ordinary shareholders 350 615 468 2 509
ADDITIONAL INFORMATION
Profit attributable to
ordinary shareholders 350 615 468 2 509
Adjusted for
* Exceptional items (3) (14) (11) (57)
* Impairment charge 13 13
* Goodwill amortised 5 21 21
* Taxation on adjustments (4) (4)
Headline earnings 352 601 487 2 482
Headline earnings US$ (average spot) 48 58 63 276
Performance per ordinary share
Headline earnings per share (cents) 79 135 109 557
Attributable earnings
per share (cents) 78 138 105 563
PHYSICAL INFORMATION ("000 tonnes)
Flat Steel Products
- Vanderbijlpark
Liquid steel production 935 957 908 3 711
Sales 922 816 734 3 052
* Local 483 660 427 2 167
* Exports 439 156 307 885
* Local sales as % of total sales 52 81 58 71
- Saldanha Steel
Liquid steel production 320 311 306 1 251
Sales 326 275 265 1 160
* Local 72 118 72 406
* Export 254 157 193 754
* Local sales as % of total sales 22 43 27 35
Long Steel Products
Liquid steel production 548 535 534 2 161
Sales 442 449 529 1 828
* Local 257 278 239 965
* Export 185 171 290 863
* Local sales as % of total sales 58 62 45 53
Total
Liquid steel production 1 803 1 803 1 748 7 123
Sales 1 690 1 540 1 528 6 040
* Local 812 1 056 738 3 538
* Export 878 484 790 2 502
* Local sales as % of total sales 48 69 48 59
This report is available at Iscor"s World Wide Web site at:
http://www.iscor.com
If you have any queries regarding Iscor or your Iscor shares, please call the
Iscor ShareCare Line toll free on 0800 006 960 or +27 11 775 3420 if calling
from outside South Africa.
FINANCIAL RESULTS
Headline earnings for the September quarter were 41% lower than a year ago with
the collapse in domestic steel demand and the stronger currency overshadowing
the benefit of the increase in international steel prices. The results were
also 28% lower than the June 2003 quarter following a drop in prices and further
currency strengthening.
Cash flow for the quarter was R80 million negative as a result of a R750 million
tax payment made in respect of the past financial year"s record earnings,
resulting in a closing net cash position of R670 million.
MARKET REVIEW
China continues to dominate prospects for steel demand, although recent
reports have raised confidence that the Japanese economy is on track for a
recovery and has lately been outperforming expectations. US steel demand
remains soft, but a number of recently released economic indicators are
encouraging and suggest that an upturn in steel demand could be expected going
into the fourth quarter and continuing into next year. EU steel demand remains
lacklustre driven by the strength of the Euro against the US dollar, however
prices are steady as producers continue to restrict output.
We experienced no difficulty in placing our higher level of exports. Domestic
steel consumption remains weak with the effects of the stronger currency and
high real interest rates negatively impacting on secondary exporters and the
construction sector in particular. Domestic deliveries for the quarter were 23%
down on the September 2002 quarter although up 10% on the very poor June quarter
as a result of some customer restocking.
The 11% increase in total sales volume was the result of despatching the June
quarter inventory build-up caused by the switch from domestic to export markets
and the consequent rail congestion.
COST REDUCTION
The benefits of the stronger currency began to make an impact during the quarter
with steel cost per tonne falling by 3,3% in rand terms compared with a year
ago. Expressed in US $ terms, however, cost per tonne increased significantly
due to the strengthening of the currency emphasising the need for radical cost
cutting action in order to protect our competitive position on the international
cost curve which has deteriorated significantly.
The planning of our restructuring programme and other measures, aimed at further
cost reductions, is well advanced. The level of sustainable savings and the
related once-off costs will be announced at the time of releasing our results
for the six months to December 2003. Provision for the up-front costs will be
made in the December quarter.
OUTLOOK
The average US $ selling price during the December quarter is expected to show
some improvement as a result of firmer international prices together with a
higher value-added product mix. However, the effect of this is likely to be
offset by a further decline in domestic sales volumes due to the slow-down in
off-take during December. The normal operating results for the second quarter,
expressed in US $ terms, should not change significantly although rand earnings
will be lower if the current rand/dollar exchange rate level is maintained. The
once-off cost of restructuring is likely to have a material negative impact on
the December quarter results.
Domestic steel consumption is expected to recover during the first half of 2004,
while international markets are expected to remain strong.
Registered Office:
Iscor Corporate Centre
Roger Dyason Road
Pretoria West
Pretoria, 0002
Transfer Secretaries:
G S Registrars (Pty) Limited
108 Johan Avenue
Sandton
PO Box 653224,
Benmore,
2010
Directors:
K Ngqula (Chairman), LL van Niekerk (Chief Executive Officer), DK Chugh*,
WF Coertzen, RG Cottrell, M Macdonald, S Maheshwari*, A Mittal*, LN Mittal*,
Dr KDK Mokhele, MJN Njeke, AM Thebyane, Dr MJUT van Wijngaarden
*Citizen of India.
Company Secretary:
A van der Merwe
Date: 23/10/2003 02:00:12 PM Produced by the JSE SENS Department
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