Egypt's largest steel producer Ezzsteel, formerly Al Ezz Steel Rebars S.A.E., has announced its consolidated financial results for 2009.
According to the statement released by the company, in 2009 Ezzsteel's net proft after tax and minority interests amounted to EGP 88 million ($15.99 million), plummeting by 92.86 percent compared to EGP 1.233 billion in 2008, due to lower steel prices during the year. Meanwhile, the company's consolidated net revenues in the given year came to EGP 12.6 billion ($2.29 billion), decreasing by 42.2 percent year on year. The weakness in flat steel demand is stated as a reason in the decision to suspend production at its flat steel plant EFS, which also affected the sales revenue.
In 2009, the producer's long steel sales volume reached 3.26 million metric tons, which represents a three percent increase over the 3.16 million metric tons sold during 2008. This increase over the previous year was aimed at meeting strong domestic demand for long products, which grew 41 percent year on year. Flat steel sales volumes on the other hand witnessed a decline from 1.46 million metric tons in 2008 to 1.02 million metric tons for 2009, with a fall of 30 percent, due to the continued shutdown of the EFS production facility, with any residual demand met by production at EZDK, which commensurately increased its flats production by 41 percent.
Long steel products accounted for 76 percent of total sales in 2009, while flat steel products represented 23 percent of sales.
Long product exports accounted for two percent of total long sales, due to the continued strength of domestic market demand for long products. Flat product exports accounted for 51 percent of total flat sales due to continued focus on exports.
The long steel production volume reached 3.29 million metric tons during 2009, increasing by three percent, while the flat steel production volume declined by 31 percent, totaling 979,000 metric tons, both compared to 2008.
Commenting on the results, Ezzsteel's managing director Paul Chekaiban said, "The past year has been challenging for the steel industry globally. Conditions were tough in most markets with steel demand remaining depressed during 2009. However, unlike the majority of steelmakers around the globe, Ezzsteel was able to operate profitably."
Regarding the outlook for 2010, Ezzsteel said that it remains confident about the continued strength of the Egyptian market, which has remained largely unaffected by the global economic slowdown. Long product demand is expected to continue to be strong, due to the private housing market and local real estate activity. While conditions in the global flat steel market have been very weak since the last quarter of 2008, the company stated that is sees a sustained improvement evidenced by the increase in flat steel prices.