Despite the crisis, Třinecké železárny achieved the profit CZK 1.2 billion

The results of Třinecké železárny in 2008 were influenced by financial and economic crisis, which fully hit also all the steel companies in the second half of 2008. Despite the fact that Třinecké železárny profited on favorable situation at the steel market in the first half of 2008, the second turned favorably development of economy. Nevertheless the Třinec Company recorded the profit after taxation in amount of CZK 1.2 billion and ranked last year as a good one with regard to previous 15 years.

“The year 2008 showed us two faces. The first favourable one lasted over the first three quarters of the year and continued the previous extremely successful period. The second one was characterised by a considerable drop of demand as a consequence of the financial crisis“ tells the Chairman of Supervisory Board Tomáš Chrenek and adds that the global financial crisis, which started in the second half of 2008, perceivably hit Europe as well as the Czech Republic where steel consumption dropped by more than 20 % on the year-on-year basis. “These trends will continue in 2009. Even optimistic forecasts do not expect improvement earlier than at the end of 2009. The return to the level of previous years will be slow and it could even last several years.“

The alternations caused by the financial crisis, particularly a decline in export orders and tightening credit conditions led to unprecedented performance drops in the Czech economy as well as in Europe and as a consequence caused an increase in stock levels and work in progress. In 2008, steel production in the Czech Republic fell year on year by almost 10 percent, from 7.1 million tones to 6.4 million tones. Třinecké železárny’s share in this volume is 38.3 percent, which represents year-on-year growth of 2 percent.

Despite the difficulties brought by the crisis, Třinecké železárny succeeded in achieving the profit after taxation in amount of CZK 1.204 billion in last year. In 2007 thanks to huge global demand on steel, Třinecké železárny recorded the profit after taxation in amount of CZK 3.633 billion. The operational profit fell from CZK 4.372 billion in 2007 to CZK 1.377 billion in 2008. The revenues increased year on year by more than CZK 1.5 billion and recorded CZK 37.085 billion.

"According to financial point of view the year 2008 was not bad but definitely not so successful as years before,“ tells the Chairman of BoD and CEO Jiří Cienciala and adds that the steel company had to initiate forced regulation of production at the end of last year. In 2008, Třinecké železárny produced 1,983 kt of pig iron in comparison with 2,074 kt a year before. The sales of our products declined by 91 tones to the level of 2,301 kt year-on-year.

The Tinecké železárny – Moravia Steel Group has been aimed at the reconstruction of production facilities, implementation of latest technologies and ecological projects to improving of environment. Since 1997 Třinecké železárny has expanded over CZK 13 billion, whereas on ecological projects over CZK 4 billion.

Last year, the Třinec Company invested CZK 1.01 billion. The most significant investment was modernization of the Garret coilers at the light section rolling mill and completion of dedusting at Sinter Plant No.1. We invested CZK 1.5 billion in the development of our subsidiary companies; this sustains our long-term efforts to maximize the value of product within our product chains. The most significant was the construction of the walking-beam furnace in Sochorová válcovna TŽ in Kladně (drawing mill), reconstruction and modernization of rolling mill Big Mannesmann in Válcovna trub TŽ in Vítkovice (tube mill) and installation of new combined drawing facility Schumag in Ferromoravia in Staré Město u Uherského Hradiště.

Last year, the Třinec Group increased by two companies – Hanácké železárny a pérovny (springs) and Šroubárna Kyjov (screws) – which production fit into our strategy of downstream product chains.

Last year’s average salary in Třinecké železárny that belongs with its 5.400 employees to the biggest employers in Northern Moravia overcame a level of CZK 27,402. This amount highly exceeds the current average salary in the Czech Republic and presents a growth of CZK 603 year on year.

13.5.2009