Ispat reports 3Q sales increase

Wednesday, 23 October 2002, 07:00 Hrs
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ROTTERDAM: Britain-based steel tycoon Lakshmi Mittal's Ispat International has announced a net income of $26 million in the third quarter of this fiscal against $98 million losses in the same period last year.

The Rotterdam-based Ispat, the flagship of Mittal's stable of companies, has posted a net income of 21 cents per share in the third quarter.

Ispat, which claims to be one of the world's largest global steel producers, has manufacturing operations in the U.S., Canada, Mexico, Trinidad, Germany and France. It produces a broad range of flat and long products with more than 90 percent of its sales accounted for in the North American Free Trade Agreement (NAFTA) and the European Union member countries.

Ispat's consolidated sales and EBITDA -- or net income plus income tax expenses, net interest expense and depreciation -- during the third quarter amounted to $1.26 billion and $143 million respectively, compared with $1.06 billion and a negative amount of $3 million respectively during the third quarter of 2001.

During the third quarter of the current year, Ispat's total steel shipments increased by 12 percent to 3.9 million tonnes up from 3.5 million tonnes in the third quarter of 2001. Net sales rose by 19 percent during the same period from $1.014 billion to $1.207 billion.

Ispat's financial performance improvement in terms of gross profit -- sales less cost of sales, exclusive of depreciation -- and operating income as a result of improvement in sales volume and prices as well as benefits of continuous cost reduction efforts offset in part by increases in costs.

Gross profit, according to Ispat sources, increased significantly by 207 percent up from $57 million in the third quarter of 2001 to $176 million in 2002.

The company has been saying its operations continued to be adversely affected by increases in prices of raw materials and energy; additionally, wages increases, which were anchored in a collective agreement, were also having an impact on the company's operations.

"These cost increases were partly mitigated by our ongoing cost-saving efforts," a company spokesperson said.

Ispat's sales rose by four percent to $3.564 billion during the first nine months of 2002, up from $3.411 billion during the corresponding period of the previous year. Total steel shipments increased by four percent to 11.3 million tonnes, up from 10.9 million tonnes in the first nine months of 2001.

Net sales also posted a four percent growth during the same period to $3.389 billion up from $3.253 billion.

Despite uncertainties prevailing in the steel business -- the U.S., the biggest market, faces a glut of steel products with U.S. steel producers coming under tremendous price pressure -- Ispat has been saying it expects to continue to benefit from the improvements in market conditions.

"We will continue to remain focused on our continuous improvement and cost-reduction efforts, as well as efficient cash flow management and debt reduction," an Ispat spokesperson said.

The Ispat spokesperson averred that based on the company's assessment of its business environment, there was a strong possibility of further improvement of its operating results in the fourth quarter.
Source: IANS
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