Liepājas metalurgs 10.01.2007
Company commentaries to the articles in BNS and “Dienas Bizness”
Commenting upon information published by BNS on January 9, 2007 and
articles published by newspaper “Dienas bizness”, we would like to
acknowledge that on December 22, 2006 JSC "Liepajās metalurgs" the
Board revised the draft budget, 2007.
The results of our business activities depend very much on the price
level of production and main raw-materials on the world market of
ferrous metals. Analyzing supply and demand of the market in the
year 2006 and possibilities of production capacities of JSC "Liepājas
metalurgs" in the year 2007 we plan net turnover 179,7 million LVL
and profit 1,091 million LVL.
In the year 2007 the JSC "Liepājas metalurgs" plans to produce 545
thousand tons of crude steel by our own powers what can not be said
about production of the rolled metal. According to the draft budget
for the year 2007 we plan to produce 647 thousand tons of rolled metal,
however the production of rolled metal very much depends on the demand
on the market of ferrous metals. In case the required assortment
consists of the rolled metal of smaller sizes, the output will be less.
The profit level in the year 2007 will be very strongly affected by
the rise of prices of natural gas, which will cause an increase of
the expenses by 5,5 million LVL, but the rise of prices of electricity
will require further increase of the expenses by 1,4 million LVL.
With the business partners “Siemens-VAI” in the December 2006 there
were only the project discussion for the new Rolling Mill with a
capacity of 400 000 tons per year.
We have to admit that JSC "Liepājas metalurgs" will not invest in
the increase of electricity capacity. According to the Regulations
issued by the Cabinet of Ministers of the Republic of Latvia No.877
“On the conditions for special connection to the electricity
transmission system for JSC "Liepājas metalurgs"” issued on October 24,
2006 the operator of electricity transmission system will provide
transmission of electricity for the planned modernization of steel
melting at JSC "Liepājas metalurgs".
Turnover of JSC "Liepājas metalurgs" in the year 2006 will make
193,7 million LVL but we cannot give any forecasts regarding the
profit because the results of JSC "Liepājas metalurgs" economic
activity in December 2006 have not been completed yet. We can propose
only that the profit of JSC "Liepājas metalurgs" in the year 2006
will be above 9 million LVL.
Production of JSC "Liepājas metalurgs" in the year 2006 was sold:
Country Sales (%) Sold production percentage point
change against the year 2005
Great Britain 12,96 - 4,39
Germany 12,41 5,58
Ireland 10,78 0,18
Latvia 9,82 3,83
Algeria 9,46 5,99
Russia 7,15 6,29
Lithuania 6,02 - 0,85
Poland 5,88 4,12
JSC "Liepājas metalurgs" concluded year 2005 with 4,194 million
LVL consolidated profit and net turnover – 163,269 million LVL,
but in the year 2004 the consolidated profit of JSC "Liepājas
metalurgs" was 4,747 million LVL and net turnover – 153,772
million LVL.
Companies involved in the consolidation of JSC "Liepājas
metalurgs" in the years 2004 and 2005 were as follows:
JSC "Liepājas metalurgs"
owned stocks (%)
LSEZ JSC “Liepājas osta LM” 89%
“Futbola hokeja klubs Liepājas metalurgs” Ltd. 95%
“Olimpiskais centrs ledushalle
Liepājas metalurgs” Ltd. 90%
In the reports of JSC "Liepājas metalurgs" for the year 2006 will
be included following enterprises considering the fact that they
were established in 2006:
JSC "Liepājas metalurgs"
owned stocks (%)
JSC “Sātiņi-LM” 100%
“Rūķis LM” Ltd. 100%
B.Imbovica
JSC "Liepājas metalurgs"
Chief Economist