Al Ezz Steel Rebars reports consolidated third quarter 2008 results

The audited results have been prepared in accordance with Egyptian Accounting Standards.

Consolidated net sales for 9M 2008 were EGP17.4bn compared with EGP12bn during 9M 2007, representing an increase of 45%%.

Long steel products accounted for 67% of total sales and flat steel products represented 33% of sales in 9M 2008.

The contributions of ESR/ESM, EZDK and EFS to net sales for the period ending 30 September 2008 were 29%, 52%, and 19% respectively.

Sales of long products constituted the largest proportion of consolidated net sales in the period as demand within the Egyptian market remained robust.

Again, long sales were primarily directed towards servicing the construction growth within the local market, with only 1% of long products exported.

Long products production for 9M 2008 reached 2,370,742 tons compared with 2,335,569 during 9M 2007, representing a slight year-on-year increase.

Flat products production for 9M 2008 was 1,227,231 tons, a slight decrease from 9M 2007 production of 1,259,209 tons.

Flat steel production volumes at EZDK were lower than Q2 2008 as a result of damage to an electrical transformer that resulted in a 27 day shutdown of the flat products facility in July.

Consolidated cost of goods sold for 9M 2008 represented 76% of consolidated net sales.

Despite inflation in global raw material costs, this ratio was managed at the same level from 9M 2007.

Gross profit of EGP4.1bn in 9M 2008 represented an increase of 43% over the EGP2.9bn recorded in 9M 2007, largely as a result of record selling prices during the quarter.

Despite cost inflation, the company maintained a gross profit margin of 24%, as the benefits of its integration strategy were felt.

EBITDA for the period reached EGP4.2bn, up from EGP3.2bn for the same period in 2007 representing an increase of 32%.

ezzsteel continues to be one of the largest corporate tax payers in Egypt with Tax and Deferred Tax amounting to EGP674m in 9M 2008, up from EGP442m in 9M 2007.

In 9M 2008, net profit after minority interests was EGP1.5billion, up 66% from the comparable period in 2007.

Correspondingly, the earnings per share of EGP8.49 in 9M 2008 was 66% higher than EGP5.12 per share reported in 9M 2007 on a weighted average number of shares basis.

ezzsteel completed a successful EGP1.1bn bond issue in June and conducted a capital increase of EGP1.8bn by way of a rights issue in September.

During the period, ezzsteel increased its stake in EZDK from 50.28% to 53.24%.

At the end of the period, ezzsteel had cash on hand of EGP3.7bn and net debt of EGP2.8bn.

The company has a conservative level of gearing of Net Debt / Equity of 0.33 times, and Net Debt / Annualised EBITDA of 0.17 times.

During the period, ezzsteel increased its stake in EZDK from 50.28% to 53.24%.