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ISPAT ISCOR LIMITED - FINANCIAL RESULTS
ISPAT ISCOR LIMITED
(Formerly Iscor Limited)
Registration number: 1989/002164/06
Share code: IIS ISIN: ZAE000057162
FINANCIAL RESULTS
Headline earnings for the quarter were up by 347% (417% in US Dollar terms)
over the corresponding quarter of the previous year, driven primarily by record
global steel prices and significantly higher domestic sales.
Operating profit for the quarter was 15% up (19% in US Dollar terms) on the
previous quarter excluding the effect of the Business Assistance Agreement
(BAA) remuneration charge.
COMPARABLE HEADLINE EARNINGS (Rm)
Quarter ended
30 September 30 June
2004 2003 2004
Operating profit 2 235 564 1 945
Net financing income/(costs) 1 (28) (15)
Equity income 39 20 151
Taxation (698) (202) (618)
Minority interest (2) (2)
Comparable earnings 1 575 352 1 463
BAA remuneration* (511)
Restructuring costs*
Additional interest adjustment on non-current
provisions* (70)
Headline earnings 1 575 352 882
Comparable headline earnings US$ (at average spot
rate) 248 48 212
*After tax
Six months
ended
31 December
2003
Operating profit 1 504
Net financing income/(costs) (69)
Equity income 88
Taxation (513)
Minority interest (3)
Comparable earnings 1 007
BAA remuneration* (429)
Restructuring costs* (116)
Additional interest adjustment on non-current provisions*
Headline earnings 462
Comparable headline earnings US$ (at average spot rate) 145
*After tax
GROUP INCOME STATEMENT
Quarter ended
30 September 30 June
2004 2003 2004
Rm Rm Rm
Revenue 6 387 4 782 5 675
Flat Steel Products
Vanderbijlpark 3 319 2 656 3 117
Saldanha Steel 1 036 699 818
Long Steel Products 1 780 1 242 1 564
Coke & Chemicals 395 217 293
Other 26 29 25
Inter Group (169) (61) (142)
Operating profit 2 235 564 1 214
Flat Steel Products
Vanderbijlpark 1 131 349 1 230
Saldanha Steel 378 39 211
Long Steel Products 578 159 426
Coke & Chemicals 188 46 108
Other 5 12 8
Corporate (45) (41) (38)
BAA remuneration (731)
Restructuring costs
Net financing income/(costs) 1 (28) (115)
Profit from equity accounted
investments before tax 39 20 151
Surplus on sale of
residential properties 3
Goodwill amortised (5) (5) (6)
Taxation (698) (202) (368)
Minority interest (2) (2)
Profit attributable to
ordinary shareholders 1 570 350 876
ADDITIONAL INFORMATION
Profit attributable to ordinary
shareholders 1 570 350 876
Adjusted for
Surplus on sale of
residential properties (3)
Goodwill amortised 5 5 6
Headline earnings 1 575 352 882
Performance per ordinary share
Attributable earnings per share (cents) 352 78 196
Headline earnings per share (cents) 353 79 198
Six months
ended
31 December
2003
Rm
Revenue 9 175
Flat Steel Products
Vanderbijlpark 5 026
Saldanha Steel 1 364
Long Steel Products 2 496
Coke & Chemicals 409
Other 37
Inter Group (157)
Operating profit 725
Flat Steel Products
Vanderbijlpark 979
Saldanha Steel 107
Long Steel Products 348
Coke & Chemicals 103
Other 28
Corporate (61)
BAA remuneration (613)
Restructuring costs (166)
Net financing income/(costs) (69)
Profit from equity accounted
investments before tax 88
Surplus on sale of
residential properties 12
Goodwill amortised (11)
Taxation (279)
Minority interest (3)
Profit attributable to
ordinary shareholders 463
ADDITIONAL INFORMATION
Profit attributable to ordinary
shareholders 463
Adjusted for
Surplus on sale of
residential properties (12)
Goodwill amortised 11
Headline earnings 462
Performance per ordinary share
Attributable earnings per share (cents) 104
Headline earnings per share (cents) 104
PHYSICAL INFORMATION
(`000 tonnes ) Quarter ended
30 September 30 June
2004 2003 2004
Flat Steel Products
- Vanderbijlpark
Liquid steel production 805 935 995
Sales 811 922 774
Local - DSP 61 75 83
- Other 539 408 498
Exports 211 439 193
Local sales as % of total sales 74 52 75
- Saldanha Steel
Liquid steel production 343 320 235
Sales 306 326 249
Local - DSP 97 42 66
- Other 67 30 57
Export 142 254 126
Local sales as % of total sales 54 22 49
Long Steel Products
Liquid steel production 542 548 557
Sales 473 442 488
Local 312 257 319
Export 161 185 169
Local sales as % of total sales 66 58 65
Total
Liquid steel production 1 690 1 803 1 787
Sales 1 590 1 690 1 511
Local - DSP 158 117 149
- Other 918 695 874
Export 514 878 488
Local sales as % of total sales
- Including DSP 68 48 68
- Excluding DSP 58 41 58
Six months
ended
31 December
2003
Flat Steel Products
- Vanderbijlpark
Liquid steel production 1 870
Sales 1 664
Local - DSP 150
- Other 792
Exports 722
Local sales as % of total sales 57
- Saldanha Steel
Liquid steel production 645
Sales 622
Local - DSP 114
- Other 70
Export 438
Local sales as % of total sales 30
Long Steel Products
Liquid steel production 1 080
Sales 939
Local 496
Export 443
Local sales as % of total sales 53
Total
Liquid steel production 3 595
Sales 3 225
Local - DSP 264
- Other 1 358
Export 1 603
Local sales as % of total sales
- Including DSP 50
- Excluding DSP 42
MARKET REVIEW
International
Overall global steel demand remained strong during the past quarter with US &
EU growth off-setting some easing in Asia. Prices also improved but are
expected to level off.
Prices realised for both flat and long steel exports for the quarter were
substantially higher than the same period last year (by 104% for hot rolled
coil and 77% for low carbon wire rod) and also up on the second quarter (by 19%
and 36%, respectively). Prices for the fourth quarter are expected to remain at
current levels.
Domestic
Domestic sales volumes increased by 33% compared to the same quarter last year
and by 5% compared to the previous quarter.
While underlying demand remains firm, the `inventory build` element has now
moderated and fourth quarter despatches are expected to be at a lower level
than the third quarter.
PRODUCTION
Production for the quarter was negatively affected by two stoppages at
Vanderbijlpark for a 46 day planned interim repair of blast furnace D in
July/August with a loss of 195 000 tonnes of liquid iron and for a smaller
routine repair stoppage.
All other operating units performed well, with Saldanha Steel achieving a
record output.
MARKET COKE EXPANSION PROJECT
During September the Board approved the construction of another coke battery at
Newcastle for the supply of an additional 450 000 tonnes of market coke to the
South African ferro-alloy industry. This will replace imports and more than
double our current market coke production of 420 000 tonnes per annum. The
plant is scheduled for commissioning during the third quarter of 2006. The
project will make an attractive contribution to earnings.
COST REDUCTION DRIVE
All cost reduction initiatives are on target. However, prices of key input
materials and services continue to increase, particularly coking coal, alloys,
ocean freight and railage.
Price escalations and the impact of lower production for the quarter, offset
the benefits of the cost reduction drive, resulting in a net increase in costs
per tonne.
OUTLOOK
Earnings for the fourth quarter are expected to be similar to those of the
third quarter with the benefits of higher throughput offsetting the negative
impact of lower domestic deliveries.
The International Trade Commission of South Africa recently called for comment
on a proposal to abolish the current 5% ad valorem duty on steel imports. Such
a move would put the South African steel industry at an international com-
petitive disadvantage as it already has one of the lowest duties and one of the
least aggressive anti-dumping dispensations of any steel producing country. If
implemented, it may have a negative impact through possible increased imports.
Registered Office
Ispat Iscor Corporate Office
Roger Dyason Road
Pretoria West 0002
Transfer Secretaries
Computershare Investor Services 2004 (Pty) Limited
70 Marshall Street
Johannesburg,2001 PO Box 61051, Marshalltown, 2107
Directors: K Ngqula (Chairman), LL van Niekerk (Deputy Chairman),
DK Chugh Chief Executive Officer)*, RG Cottrell, S Maheshwari*,
CE Markus, JJA Mashaba, A Mittal*, LN Mittal*, Dr KDK Mokhele,
MJN Njeke, V Sethuraman*
*Citizen of India.
Company Secretary: A van der Merwe
This report is available on the Ispat Iscor World Wide Web site at:
http://www.ispatiscor.com
Share queries: Please call the Ispat Iscor ShareCare Line toll free on
0800 006 960 or +27 11 775 3420 if calling from outside South Africa.
Date: 21/10/2004 03:00:10 PM
Produced by the JSE SENS Department
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