Year-end Report for April 1999 - March 2000

Year-end Report for April 1999-March 2000 * The result after financial items for the fourth quarter was a profit of SEK 987 million (-175m). This corresponds to earnings per share after full tax of SEK 5.07 (-0.85) for the quarter. The result for the fourth quarter benefited from strong production and deliveries and increased conversion margins. This acceleration in the improvement of prices and margins is expected to continue on the back of strong world demand for stainless products. * The result after financial items for the financial year was a profit of SEK 1,206 million (-1,211 m). This corresponds to earnings per share after full tax of SEK 6.11 (-6.56). The result includes the benefit of SEK 353 million resulting from the refund of pension surplus by SPP. * Investments totalling SEK 392 million have been approved today which will significantly improve the profitability of wide coil plate, special grades and U.S. bar products. * The Board of Directors is confident about the trading outlook and has proposed that a dividend of SEK 2.00 (nil) per share to be paid in respect of the 1999/2000 financial year. - April 1999 - April 1998 March 2000 March 1999 Net sales (SEKm) 16,093 15,812 Operating result before (SEKm) 1,782 -676 depreciation Result after financial (SEKm) 1,206 -1,211 items Net result for the period (SEKm) 965 -1,036 Earnings per share after (SEK) 6.11 -6.56 full tax Return on equity after full (%) 13 negative tax Return on capital employed (%) 14 negative Net borrowings at financial (SEKm) -2,343 -1,027 year end "The hard work on restructuring and cost reduction is now paying back in improved manufacturing performance and costs. Strong market conditions, which are expected to continue through at least this year and which will spread to the Group's entire product range, means that a good and growing level of profitability can be expected. The Group will continue with its strategy of incremental fast payback investments to squeeze maximum returns from its assets" says Avesta Sheffield's CEO, Stuart Pettifor. GROUP Market Activity in the world's major economic regions strengthened over the last quarter. Consequently the consumption of stainless steel products and improvements in price accelerated. A recovering manufacturing sector, especially in the areas of automotive, white goods and construction, has supported demand growth in Europe. European shipments of cold rolled sheet and strip rose by 16 per cent during the last quarter to 797,000 tonnes. Demand for hot rolled plate and tubular products also improved and consumption is expected to improve further during the next half year as rises in commodity prices stimulate project investment. Demand for coil products in South East Asia continued its impressive upturn, lead by earthquake reconstruction efforts in Taiwan and the booming economy of South Korea. Improving market fundamentals in North America have impacted positively on both consumption and base prices. Rising alloy costs and improved consumption contributed to improvements in European coil base prices of approximately 8.5 per cent over the quarter and, since January 2000, consecutive monthly base price increases in Europe have been achieved. The gap between Asian and North American base prices continued to narrow as economic sentiment in South East Asia remained optimistic. The tightening of supply and lengthening lead-times drove selling prices in Western Europe and North America to follow a similar yet less dramatic upward trend. Base price improvements of approximately 10 per cent were achieved in the hot rolled plate market as improving demand and increasing levels of project investment were seen. Net sales Delivered tonnage of 931,000 (882,000) tonnes for the financial year was 6 per cent up on last year. Deliveries in the fourth quarter totalled 286,000 (229,000) tonnes. High production levels at all the Group's operations through the final quarter enabled the achievement of record quarterly deliveries. ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/2000/05/23/20000523BIT00760/bit0001.doc http://www.bit.se/bitonline/2000/05/23/20000523BIT00760/bit0002.pdf