Source - RNS
RNS Number : 1317L
EZZ Steel Company - S.A.E.
29 September 2016
 

 

 

 

 

EZZSTEEL REPORTS CONSOLIDATED H1 2016 RESULTS

 

Cairo, 29 September 2016 - ezzsteel (EGX: ESRS; London Stock Exchange: AEZD), the largest independent producer of steel in the MENA region and market leader in Egypt, today announced its consolidated results for the period ending 30 June 2016. The audited results have been prepared in accordance with Egyptian Accounting Standards.

 

Paste the following link into your web browser to download a PDF of the full financial statements related to this announcement:

http://www.rns-pdf.londonstockexchange.com/rns/1317L_-2016-9-28.pdf

 

Key highlights

EGPMn

 

 

H1 2015

H1 2016

YoY % (+/-)

Net sales

9,254

9,003

-3

Gross profit 

432

819

+90

EBITDA*

378

808

+113

Net profit after tax and minority interest

(337)

(376)

 

Earnings per share**

(0.62)

(0.69)

 

Net debt to equity

2.69

2.92

 

 

 

 

 

 

 

*EBITDA = sales - cost of goods sold - selling & marketing expense - G&A expense + depreciation and amortisation

**EPS = Net profit after tax & Minority Interest / No. of shares at the end of the period

 

Comment

Commenting on the results, Mr Paul Chekaiban, Chairman and Managing Director of ezzsteel, said:

 

"Continuing the trend we have seen in the first quarter of 2016, international steel markets remained weak during the second quarter and this, combined with the erratic volatility of the Egyptian financial environment, has led to us recording a loss during the period.

 

"However, our average overall operating margin has remained solid and we are seeing greater balance in the operating margin across the business units. This is due to the enhanced flexibility that we have built into our business model in recent years representing a first step towards gradual recovery."

 

 

For further information:

 ezzsteel

 

 

   Kamel Galal

+20 2 3304 6060

+20 100 539 5499

   Ashraf El Ghannam

+20 2 3304 6060

 

   Ahmed Saad

+20 2 3304 6060

 

 CNC Communications

 

 

   Nick Bastin

+44 20 3219 8814

+44 7931 500 066

   Maximilian Karpf

 

+44 20 3817 9937

 

+44 7921 078 920

 

 

About ezzsteel

ezzsteel (formerly: Al Ezz Steel Rebars) is the largest independent steel producer in the Middle East and North Africa, and the Egyptian market leader, with a total actual capacity of 5.8 million tonnes of finished steel.

 

In 2015, the Company produced 3.2 million tonnes of long products (typically used in construction) and 636,000 tonnes of flat products (typically used in consumer / industrial goods). ezzsteel deploys the latest in modern steel-making technology and is committed to further increasing vertical integration across its plants, boosting operational flexibility.

 

Operational Review

 

All of the below financial breakdowns are based on ezzsteel's consolidated financials, which include the financial performance of ESR/ERM, EZDK and EFS.

 

Sales & Production

 

Consolidated net sales for H1 2016 were EGP 9 billion, representing a decrease of three per cent year on year was mainly due to the timing of the holy month of Ramadan, which largely fell within the second quarter of 2016. Flat product prices were down by nine per cent versus the same period of last year while long product prices were up by three per cent during the same period. 

 

Sales after elimination

EGPMn

ESR/ERM

EZDK

EFS

Consolidated

   Long

2,783

3,773

1,120

7,676

   Flat

-

1,233

10

1,243

   Others

 

79

5

84

Total

2,783

5,085

1,135

9,003

 

Long steel products accounted for EGP 7.7 billion, or 85 per cent of sales in H1 2016, while flat steel products represented 14 per cent of sales at EGP 1.2 billion. Long product exports accounted for three per cent of total long sales. Flat product exports accounted for 32 per cent of total flat sales.

 

Sales Value

EGPMn

Domestic

per cent

Export

per cent

Long

Flat

 

Long sales volumes were 1.72 million tonnes during H1 2016, one per cent lower than the 1.73 thousand tonnes sold during the same period last year.

 

Flat sales volumes, which were concentrated at EZDK, fell by 15 per cent to 323 thousand tonnes in H1 2016, due to lower production, as weak international markets made sales of flat products unattractive.

 

The group's consolidated sales volumes totalled 2,042 million tonnes in H1 2016, a decrease of three per cent from the 2,112 million tonnes sold in H1 2015.

 

The contributions of ESR/ERM, EZDK and EFS to the consolidated net sales for the period ending 30 June 2016 were 31 per cent, 56 per cent, and 13 per cent respectively.

 

Long steel production volumes totalled 1,636 thousand tonnes during H1 2016, flat compared to H1 2015. Flat steel production volumes decreased by six per cent to 361 thousand tonnes for the period, compared to 384 thousand tonnes in the previous year.

 

Cost of Goods Sold

 

Consolidated Cost of Goods Sold for H1 2016 represented 91 per cent of sales, leading to an increase in gross profit margin from five per cent in H1 2015 to nine per cent in H1 2016.

 

EFS's Cost of Goods Sold was at 109 per cent, compared with 121 per cent in the same period last year and 133 per cent in Q4 2015. This reflects the slightly improved capacity utilization level at that facility.  EZDK's COGS to sales ratio gradually improved to reach 91 per cent, versus 93 per cent in the prior year period, as the shortage of natural gas has been slightly ameliorated due to increased LNG imports into Egypt.   

 

 

Standalone figures

Consolidated

EGPMn

ESR/ERM

EZDK

EFS

ezzsteel

Sales

2,831

5,068

1,138

9,003

COGS

2,353

4,632

1,242

8,184

COGS/Sales

83%

91%

109%

91%

 

Gross profit

 

Gross profit of EGP 819 million was recorded for H1 2016, an increase of 90 per cent from the EGP 432 million recorded in H1 2015.

 

EBITDA

 

EBITDA for H1 2016 amounted to EGP 808 million, representing an increase of 113 per cent from EGP 378 million in H1 2015.

 

Tax

During H1 2016 benefited from a deferred tax asset of EGP 143 million and income tax of EGP 10.8  

 

Net result after tax and minority interests

 

Net result after tax and minority interests recorded a loss of EGP 376 million for H1 2016, 12 per cent higher than during the same period in 2015. This was mainly due to EGP 553 million of foreign exchange losses from the devaluation of the Egyptian pound during the period.

 

Liquidity and capital resources

 

At the end of the period, ezzsteel had cash on hand of EGP 3.8 billion and net debt of EGP 13.6 billion. The company has a gearing of Net Debt / Equity of 2.92 times.

 

Outlook

 

The successful launch of our new DRI facility at Suez has extended the advantages of our flexible business model to all ezzsteel business units. This flexibility will prove instrumental in mitigating the adverse conditions in which ezzsteel is expected to operate in the coming quarters.
 

Divisional Overview

 

EZDK

Sales (EGP):

 

H1 2015

H1 2016

 

 

Value:

6,185

5,067

Mn

 

Volume:

 

 

 

 

Long:

1,045,690

855,005

Tonnes

 

Flat:

380,901

320,153

Tonnes

 

Exports as % of Sales:

 

 

 

 

Long:

4

6

 

 

Flat:

37

38

 

 

EBITDA:

416

461

Mn

Production:

 

 

 

 

 

Long Products:

853,292

841,882

Tonnes

 

Flat Products:

384,118

337,640

Tonnes

 

Billets:

865,029

853,467

Tonnes

 

 

 

 

 

ESR/ERM

Sales (EGP):

 

 

 

 

 

Value:

2,952

2,831

Mn

 

Volume:

648,201

616,509

Tonnes

 

Exports as % of Sales:

-

-

 

 

EBITDA:

51

349

Mn

Production:

 

 

 

 

 

Long Products:

595,218

567,563

Tonnes

 

Billets:

368,778

183,667

Tonnes

 

 

 

 

 

EFS

Sales (EGP):

 

 

 

 

 

Value:

906

1,138

Mn

 

Volume:

 

 

 

 

Long:

199,205

254,573

Tonnes

 

Flat:

-

2,480

Tonnes

 

Exports as % of Sales:

 

 

 

 

Long:

-

-

 

 

Flat:

-

-

 

 

EBITDA:

(97)

(7)

Mn

Production:

 

 

 

 

 

Long Products:

193,664

227,050

Tonnes

 

Flat Products:

-

24,127

Tonnes

 

Billets:

24,859

217,361

Tonnes

 

 

- Ends -
 

Disclaimer:

This press release is issued by ezzsteel (formerly: Al Ezz Steel Rebars S.A.E.) the "Company", in connection with the disclosure of the Company's financial results for the 6 month period ending 30 June 2016. This press release includes forward-looking statements. These forward looking statements include all matters that are not historical facts. In particular, the statements regarding the Company's strategy, the expected strength of demand for long and flat products in Egypt and in regional and international markets, and other future events or prospects are forward looking statements. Recipients of this document should not place undue reliance on forward looking statements because they involve known and unknown risks, uncertainties and other factors that are in many cases beyond the control of the Company. By their nature, forward looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance and the Company's actual results of operations, financial condition and liquidity, and the development of the industry in which the Company operates may differ materially from those expressed in or implied by the forward-looking statements contained in this document. The cautionary statements set forth above should be considered in connection with any subsequent written or oral forward-looking statements that the Company, or persons acting on its behalf, may issue. Various factors could cause actual results to differ materially from those expressed or implied by the forward-looking statements in this document including worldwide economic trends, global and regional trends in the steel industry, the economic and political climate of Egypt and the Middle East and changes in the business strategy of the Company and various other factors. These forward-looking statements reflect the Company's judgment at the date of this document and are not intended to give any assurances as to future results. The Company undertakes no obligation to update these forward-looking statements, and it will not publicly release any revisions it may make to these forward-looking statements that may result from events or circumstances arising after the date of this document. None of ezzsteel, any of its directors, officers or employees or any other person can give any assurance regarding the future accuracy of the information set forth herein or as to the actual occurrence of any predicted developments. Furthermore, none of such parties shall assume, and each of them expressly disclaims, any obligation (except as required by law or the rules of the ESE, the LSE or the FCA) to update any forward-looking statements or to conform these forward-looking statements to ezzsteel's actual results.


This information is provided by RNS
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END
 
 
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