LAST YEAR VÍTKOVICE STEEL INCREASED ITS PROFIT SEVERAL TIMES

VÍTKOVICE STEEL expects that the 2004 profit will be historically the best one since the formation of the Company. In aggregation with OSINEK, a. s., the Company’s profit was 1.6 billion CZK with sales being 13.5 billion CZK. For comparison, in 2003, the Company’s pre-tax profit was 143 million CZK.

Thanks to the fact that the profit increased several times, the value of VÍTKOVICE STEEL’s equity for the first time will be higher than the basic capital. The Company’s basic capital is 2.6 billion CZK. Equity increased last year to 4.1 billion CZK from 2.5 billion CZK in 2003. Another interesting information is that return on sales in 2004 reached 11.8 %. These very positive changes in indices prove that the restructuring of the Company together with the worldwide boom on steel markets yielded its fruits.

,,The demand for VÍTKOVICE STEEL’s rolled products in 2004 was at times higher than the Company’s capacity,“ explained Vladimír Bail, Ph. D., Chairman of the Board of Directors and CEO of VÍTKOVICE STEEL. ,,This way the unusual market situation was directly forming our economic results when the sales from own products increased year on year by 49 %. One of the important factors contributing to the positive results is the restructuring of the Company which started two years ago and which was accompanied by cost reduction projects in the Company. During the last year, VÍTKOVICE STEEL reduced its production overheads costs by more than 100 million CZK, we improved also time utilization of the production equipment and to a great extent the results were facilitated also by flexible working of our sales people.” The Company’s success and growth is evident also from the growth of value added. The year on year growth of value added last year was more than doubled from 1.16 billion CZK to 2.6 billion CZK.

VÍTKOVICE STEEL currently has 1580 employees, of which 1200 in the key operations – approximately 400 in the Steel Plant, 800 in the rolling mills. This Ostrava-based steel company produces steel and rolled products (plates, heavy and medium sections, cut shapes). In the area of plates the Company is one of the most important producers in Europe. In the Czech Republic the Company is the only producer of plates. A perspective product mix offers also sheet piles. On the domestic market, VÍTKOVICE STEEL is an exclusive producers of sheet piles, part of the production is exported.