PARIS, Dec. 5, 2001 (PRIMEZONE) - Usinor (PSE:USI).
Activity
Apparent consumption decreased by 4% in Europe during the third quarter. This marked slowdown occurred everywhere in the world with the exception of China. For the first time, one can observe a reduction in the world production (1%).
Consolidated Results
Consolidated net sales for the third quarter 2001 amounted to 3,277 million euros compared to 3,651 million for the third quarter 2000, or a decrease of 10.3% on a comparable basis. This evolution reflects an overall reduction of shipped tons (Flat Carbon -5.5%, Processing and Distribution -3.4%, Stainless Steels, Alloys and Specialty Plates -1.9%) and a fall in average selling prices (Flat Carbon -9.8%, Processing and Distribution -4.6%, Stainless Steels, Alloys and Specialty Plates -8.5%).
In millions of euros Third Quarter Third Quarter
2000 2001
(unaudited) (unaudited)
Net sales 3,651 3,277
Operating income 294 -25
Net income 220 -10
EPS* 0.94 -0.04
* In euro. Excluding treasury shares held by Usinor at September 30.
Net sales by activity were as follows : 1,868 million euros for Flat Carbon Steels, 877 million for Processing and Distribution and 742 million for Stainless Steels, Alloys and Specialty Plates.
Consolidated operating income was negative at -25 million euros compared to 294 million for the third quarter 2000. Flat Carbon contributed for 10 million euros, Processing and Distribution for 20 million, the contribution of Stainless Steels, Alloys and Specialty Plates being negative at -36 million euros. This weakening of operating margins results essentially from the combined effects of falling selling prices and higher costs of raw materials.
Moreover, in a context of voluntary production cut backs, mainly in the flat carbon steels, the benefit of cost savings remains marginal and hardly offsets the impact of falling selling prices. The decrease of financial result which stands at 42 million euros for the quarter, reflects a sensitive reduction of indebtedness. Finally, share in income of equity investees was 20 million euros.
Consolidated net income for the third quarter was -10 million euros compared to 220 million for the third quarter 2000.
In euro millions At December 31, At September 30,
2000 2001
(unaudited)
Total shareholders'
equity including
minority interests 5,687 5,638
Net debt 3,069 2,696
Net debt / equity* 0.54 0.48
* Including minority interests.
At September 30, 2001, Usinor had net debt of 2,696 million euros, or a decrease of 373 million over its net indebtedness at December 31, 2000. This decrease has been made possible thanks to a significant cash generation over the first nine months of this year and linked to lower working capital requirements. In a context of reduced level of activity, the efforts made by Usinor particularly in terms of inventories management, allow the Group to confirm a reduction of working capital needs by an estimated 600 million euros for the year.
Prospects
Events of September 11, 2001 suddenly worsened the perception of a slowdown of economies already felt during the summer. In a climate of deep uncertainties, a further downward adjustment of inventories both in distribution and in the industry will continue to bear the negative trends, which affected third quarter results, despite the good activity of the automotive market in France. However, reductions on the supply side should contribute to curb the fall in selling prices and allow the year 2002 to start in an environment of stabilized volumes and prices.
This news release contains forward-looking statements that involve a number of risks and uncertainties. These statements are based on current expectations whereas actual results may differ.