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i n t e r i m r e s u l t s

i n t e r i m r e s u l t s

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i n t e r i m r e s u l t s

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  1. i n t e r i m r e s u l t s for the six months ended june 2005

  2. D a v i n d e r C h u g h c h i e f e x e c u t i v e o f f i c e r

  3. m a r k e t & o p e r a t i o n s

  4. Overview • Record half year earnings of R3 221m • Earnings per share of 723c up 108% • Operating margin of 35% up 66% • Return on equity of 37% up 61% • High international steel prices • Cost increases contained • Delivering on R9bn capital investment programme Note: All comparisons against corresponding period in 2004 Maintaining strong performance

  5. Increase in HRC US$ export price Increase in HRC Rand domestic price 35% 13% Export sales volume up 6% Slowdown in domestic sales volume (7%) Increase in HRC Rand cash cost per tonne 11% Strengthening of Rand 8% Key Result Drivers 1H’05 vs 1H’04 Good performance supported by cost containment

  6. 700 600 500 400 300 200 100 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Export Prices HRC Low Carbon Wire Rod Mittal Steel Invoiced Prices (c&f) US$/t Historical high prices prevailed

  7. Global Market Trends • Global steel demand outstripped supply in 2004/2005 • Inventory adjustments prompted recent price slide • World economic growth is expected to remain positive • Consolidation amongst steel companies globally continues • Steelmakers’ input costs will remain high • Chinese economy still growing at high rate • In 2004, China accounted for • 30% of world steel production • 32% of world steel consumption Global steel demand driven by China

  8. Chinese Market Trends • China a 320kt net importer of finished steel products in June 2005 • China a 140kt net exporter, incl billet & slab, in June 2005 • Government Policy • Foreign companies not allowed to control domestic mills • Steel and raw material export rebates will be gradually reduced

  9. Chinese Market Trends • Domestic Industry Consolidation • 10 largest mills will account for 50% of steel output by 2010 • Aims to create two industry giants with capacity > 30m tonnes • Government will not ‘in principle’ grant approval for new steel plants • Existing steel makers will be gradually reduced • Technology • Promote production of high end, low cost steel products • By 2010 steel mills to consume < 0.73 tpts of coal & < 8 tpts of water Note: tpts = tonnes per tonne of steel China imposing internal regulations

  10. South Africa Rest of Africa Total Africa Americas Asia Europe Oceania 0% 10% 20% 30% 40% 50% 60% 70% 80% 2H’04 1H’04 1H’05 Mittal Steel SA Geographic Sales Africa focus continues

  11. Global Input Cost Cycle Coking coal - Contract 350 Iron ore fines - Contract 300 250 Based to 100 200 150 100 50 Jul 2001 Jan 2002 Jul 2002 Jan 2003 Jul 2003 Jan 2004 Jul 2004 Jan 2005 Jul 2005 Steel prices supported by high input cost

  12. Freight Rates - Spot Coke - Spot Scrap - Spot Global Input Cost Cycle 700 600 500 400 Based to 100 300 200 100 0 Jul 2001 Jan 2002 Jul 2002 Jan 2003 Jul 2003 Jan 2004 Jul 2004 Jan 2005 Jul 2005 New capacity taking effect

  13. Global Input Cost Trends • Iron ore price increased by 71% • Metallurgical coking coal contracts settled at +120% • Freight rates slightly reduced but still at high levels • Coke prices reduced by 50% after peaking above US$400/t • Scrap prices coming down, still above long-term trend • Input material spot prices softening as new capacity starts to show • Various expansion projects to eliminate logistics chain bottlenecks Source: World Steel Dynamics Further input costs increase expected

  14. CI savings (Rm) - incl procurement 657 396 (141) - excl procurement 519 320 86 Number of full-time employees 12 072 11 416 10 755 Man hours per ton steel 3.9 3.7 3.4 Revenue per head (R’000) 874 1 096 1 141 HRC cash cost - R/t 1 686 1 753 1 876 - US$/t 254 284 303 Percentage value-add exports - flat 49 48 48 - long 71 77 65 Key Performance Indicators 1H’04 2H’04 1H’05 Efficiency improvements partially countered high input costs

  15. 4 000 3 500 3 000 2 500 2 000 1 500 1 000 500 0 1H’04 2H’04 1H’05 Liquid Steel Production 3707 3556 3477 ’000 tonnes 1986 1829 1799 1093 1105 1085 664 616 563 Vanderbijlpark Saldanha Long Products Total Half year production record

  16. 3 500 3 000 2 500 2 000 1 500 1 000 500 50 1H’04 2H’04 1H’05 1H’04 2H’04 1H’05 1H’04 2H’04 1H’05 1H’04 2H’04 1H’05 Domestic Export Sales Volumes 3101 3100 3033 1210 1112 1283 ’000 tonnes 1988 1891 1597 1569 1520 1750 472 470 524 984 966 910 1125 1099 996 390 426 353 593 548 547 287 594 557 350 333 540 306 214 198 Vanderbijlpark Saldanha Long Products Total Sales impacted by inventory adjustment

  17. Environmental • Environmental projects > R1bn at different stages • Vanderbijlpark • Zero effluent discharge (MTP) 222 2H’05 • Cleaning of coke ovens gas 306 1H’06 • New sinter plant off-gas system 210 2H’07 • Blast Furnace D Tap floor de-dusting 40 Commissioned • Newcastle • Reverse osmosis plant 50 1H’06 • Projects completed • Newcastle • Coke oven repair project 231 2H’04 Cost Rm Planned Completion Environmental projects on track

  18. Other Major Projects • Investment plan of R8bn at different stages • Vanderbijlpark • Blast furnace C interim repair 40 2H’05 • Blast furnace D reline 537 2H’06 • Blast furnace D – stoves 318 2H’06 • 3rd sinter strand 288 2H’06 • 2 New DRI kilns 432 2H’07 • Saldanha • Corex reline 310 2H’07 • Newcastle • Pulverised coal injection 211 Commissioned • Blast furnace N5 reline 590 2H’08 • Mittal Coke & Chemicals • Market coke expansion 455 2H’06 • Asset replacement & ongoing capex 1 280 • Other downstream projects under investigation 1 300 • Other reline & value adding projects 655 Cost Rm Planned Completion

  19. Other Major Projects • Projects completed • Vanderbijlpark • BOF control systems 112 2H’04 • Blast furnace C – throat armour repair 23 1H’04 • Blast furnace D – interim repair 139 2H’04 • Sinter plant repair and upgrade (Phase 1-3) 42 2H’04 • Saldanha • Third roll grinder 30 2H’04 • Asset replacement & ongoing capex 502 • Other reline & value adding projects 626 Cost Rm Planned Completion Strong investment programme

  20. f i n a n c e

  21. Headline Earnings Rm 1H’04 2H’04 1H’05 Revenue 10 544 12 509 12 264 Comparable operating profit 2 948 4 451 4 347 Financing cost - net interest (expense)/income (14) 50 83 - long-term provision top-up (133)# (37) (30) Tax (914) (1 551) (1 329) Equity earnings* 179 79 153 Minority interest (4) (2) (3) Comparable earnings 2 062 2 990 3 221 - in US$m 311 482 521 BAA remuneration* (511) Headline earnings 1 551 2 990 3 221 * After tax # Lower discount rate accounts for R100m Record earnings

  22. 1 750 1 500 1 250 1 000 750 500 250 0 1Q’03 2Q’03 3Q’03 4Q’03 1Q’04 2Q’04 3Q’04 4Q’04 1Q’05 2Q’05 Comparable Headline Earnings Trend 1643 1578 1575 1415 1393 Rm 669 655 657 596 352 Earnings level maintained

  23. Operating Profit Rm 1H’04 2H’04 1H’05 Vanderbijlpark 1 840 2 289 2 332 Saldanha Steel 348 799 685 Long products 640 1 129 1 195 Coke and chemicals 161 301 159 Other 18 24 12 Corporate (59) (91) (36) Comparable operating profit 2 948 4 451 4 347 BAA remuneration (731) Operating profit 2 217 4 451 4 347 Strong performance from all units

  24. Cash profits from operations 3 465 5 112 4 971 Working capital (1 069) (341) (930) BAA remuneration (731) Capex (405) (849) (493) Finance cost (22) 58 75 Tax (273) (613) (1 508) Dividends (334) (5) (1 783) Cash Flow Rm 1H’04 2H’04 1H’05 Net cash flow 1 362 2 631 332 Net cash position 1 369 3 973 4 280 Substantial tax & dividend payments

  25. Inventories 14 (302) (791) Debtors (1 214) 86 (175) Creditors 131 (125) 36 Total (1 069) (341) (930) Working Capital Rm 1H’04 2H’04 1H’05 WIP inventory building for reline

  26. Operating margin (%) 21 36 35 - on comparative basis (%)* 28 36 35 EBITDA margin (%) 26 39 40 - on comparative basis (%)* 33 39 40 Revenue/invested capital (times) 1.4 1.7 1.5 Return on equity (%) 23 40 37 - on comparative basis (%)* 30 40 37 Net cash/equity (%) 9.7 24.8 22.6 Financial Ratios 1H’04 2H’04 1H’05 * Adjusted for once-off items Sound business performance

  27. 350 300 250 200 150 100 50 Mittal Steel SA All Share Top 40 0 2002 2003 2004 2005 Share Performance Based to 100 Source: I-Net Bridge Good investment case

  28. Dividend • Dividend policy • Distributing one third of headline earnings • Dividend declared • Interim dividend of 240 cents per share -12 September 2005

  29. i n v e s t m e n t c a s e

  30. Strategy Update • 2 Mtpa throughput strategy • Several projects at EIA stage • US$50/t Cost reduction strategy • Newcastle PCI project exceeding expectations • Africa strategy • 90% Africa focus inline with development plans of SA Govt & NEPAD Strategy gaining momentum

  31. Contribution to the Economy • R9bn capital investment programme • US$704m gross export revenue • Contribution to the state treasury of R1.6bn • Procurement from affirmative business enterprises of R805m • Refocused social investment on science & technology education • Scitech exhibition (attendance 38 000 learners) • Mittal National Science Olympiad (participation 10 000 learners) Supporting economic growth

  32. Outlook for 3Q’05 • Business environment • Local demand expected to improve by up to 5% • Lower local and international steel prices • Inventory cycle completed, off-take to improve • Higher input prices will influence production costs • Exchange rate will have an important influence • Earnings • Earnings to remain robust, but materially lower compared to 2Q’05 Softer trading conditions expected

  33. Mittal Steel Company NV • The world’s largest & most global steel producer • Revenues of over US$32bn* • Shipments of 69Mt* • 14 operations on four continents • 164 000 employees over 45 nationalities • Major supplier to all steel consuming sectors • Technology leadership with major R&D centres • Significant vertical integration • Unrivalled acquisition & turnaround experience • Ranked 253rd ito revenues & 55th ito profits (Fortune 500) *Pro-forma 2005 Shaping the future of steel

  34. i n t e r i m r e s u l t s for the six months ended june 2005