The demand for steel is stronger than ever

The Salzgitter AG financial statements press conference

Today, the focus of the business press was on the Salzgitter Group. At the press conference on financial statements held in Salzgitter, Germany’s second largest steel announced the 2003 business year figures and cast a look forward on the course of the current year.

To begin with, Executive Board member Finance, Dr. Heinz Jörg Fuhrmann presented the previous business year’s figures and explained the balance sheet. In view of the partially highly unfavorable general economic conditions, pre-tax earnings (EBT) of € 42.5 million represent “an all in all still satisfactory performance” as Dr. Fuhrmann stated. Posting sales of € 4.8 billion, the Group has achieved an “all time peak” figure. The same holds true for crude steel production that now stands at an annual 8.5 million tons.

Dr. Fuhrmann also announced that In view of the still satisfactory course of business the Executive Board and Supervisory Board will propose a dividend payment of 25 cents per share at the Shareholders’ Meeting on May 26, 2004 in Braunschweig. Given the current share price of EUR 10, this equals a dividend yield of 2.5%; as in the previous years, this value is above the DAX and MDAX average. Heinz Jörg Fuhrmann was especially pleased with the development of the SZAG share price. The value gains recorded as of the end of 2002 amount to more than 75%, which would suggest that “the old economy is keeping the promises that the new economy had once proclaimed.”

Executive Board Chairman Wolfgang Leese cast a positive outlook on the ongoing 2004 business year. In addition to good opportunities, however, he cautioned that there are also “risks that are not to be overlooked“ such as the high prices for scrap, ore, coke and freight.

In the coming years the aims and objectives of Salzgitter AG will remain focused on independence, growth, profitability and differentiation over the major steel giants, explained Executive Board Chairman Wolfgang Leese. In his report Mr. Leese cited numerous strategic projects and measures geared to achieving these goals. The investment program at Salzgitter Flachstahl GmbH will be continued, for example. Within the context of its basic strategy, the Group has defined 250 projects in line with the trusted and tried procedures of the existing profit improvement program, as Wolfgang Leese outlined.

At present, it is difficult to venture any reliable statements on the economic situation in Germany. The steel markets, however, remain buoyant. A look at annual world steel production shows that “the demand for steel as a material is stronger than ever before,“ as Wolfgang Leese announced. This year’s output is expected to pass the 1 billion ton mark.

Concluding his presentation, Wolfgang Leese provided a profit forecast for the ongoing business year: Based on current information and expectations, the Group is expected to achieve pretax profits in the double-digit million region, ahead of last year’s performance.