VÍTKOVICE STEEL, a.s. MAKES PROFIT

Last year, production in all mills of VÍTKOVICE STEEL, a. s., noted record levels. The results exceeded the production in the previous period by 8-13% and this fact is reflected in the overall results of the company. The pre-tax profit of this steel company in 2003 was 143 million CZK, which is an increase of 97 million CZK against 2002 and the aggregated revenues from sold steel products were 9.09 billion CZK.

„The last year was a very successful year for steel companies in general,“ explained the situation Vladimír Bail, Chairman of BOD and CEO of VÍTKOVICE STEEL, a.s. „We noted a boom in the production of rolled products in VÍTKOVICE STEEL – the demand was much higher than the offer – and the demand for flame-cut shapes also increased resulting in year-on-year increase by 45 %. Gradually we are able to stabilize the portfolio of clients – end-users – from the steel structure sector, from the ship-building sector, from the transport machines and mechanical engineering sector. Direct sales of plates to these clients in our company makes already 45 %, which represents a 5 % year-on-year increase. In the area of sections, the sales have been stabilized to 20 %,” added Bail.

However, every year, even a successful one has also negative aspects. In the life of VÍTKOVICE STEEL such negative aspect was the impact of low exchange rate of USD reducing the profit. „Average exchange rate in 2003 was 28.20 CZK/USD,“ comented Radim Valas, a member of BOD and Finance Director, VÍTKOVICE STEEL, a. s. „when compared with 2002, with the average exchange rate of 32.70 CZK/USD, this resulted in a reduction of the realization price of plates in the dollar area by 1800 CZK/t,“ added Radim Valas.

The financial health and stability of VÍTKOVICE STEEL is reflected also in the growth of value added. For the twelve months of 2003, value added achieved 995 million CZK, which is an increase of 384 million CZK against 2002.

Table – Financials of VÍTKOVICE STEEL, a. s. – audited figures (without tolling share of OSINEK)