Ispat Posts Profit for Quarter

Ispat International N.V. reported a net income of $51 million for the fourth quarter, compared to a loss of $86 million for the fourth quarter of 2001.

Consolidated sales and operating income for the fourth quarter were $1.3 billion and $29 million, respectively, as compared to $1.1 billion and an operating loss of $68 million, respectively, for the fourth quarter of 2001. The company achieved a 16 percent increase in steel shipments to 3.7 million tons, compared to 3.2 million tons shipped in the same period last year.

Ispat International has steelmaking operations in the United States, Canada, Mexico, Trinidad, Germany and France.

Ispat Mexicana, Ispat Sidbec and Caribbean Ispat continued to achieve significant improvements in both volume and selling prices. At Ispat Inland, shipments were marginally lower but selling prices were significantly higher. At Ispat Europe, steel shipments and average selling prices in Euro were marginally higher.

At Ispat Inland, the 10 percent increase in selling prices was primarily due to an improvement in the spot market prices and in certain contract sales which were negotiated in the fourth quarter of 2002 as well as better product mix. Lower shipments at Ispat Inland reflect lower bar sales related to idling of part of company's bar production facilities during the whole of 2002.

At Ispat Mexicana, shipments increased by 98 percent in spite of loss of production in the fourth quarter of 2002. This loss of production was caused by Natural Gas supply disruption following an explosion at the supplier's premises. Additionally, there was a 38 percent increase in selling prices primarily due to improved market conditions for slabs, mainly in the U.S. market, helped in part by the favorable Section 201 trade ruling.

At Ispat Sidbec, the 15 percent increase in shipments and 13 percent increase in selling prices were primarily due to general improvement in North American market environment following the Section 201 ruling in the United States.

At Caribbean Ispat, steel shipments in the fourth quarter of 2002 were higher relative to corresponding quarter of 2001. This, however, was due to the fact that shipments in the fourth quarter of 2001 were impacted by caster project implementation. DRI shipments were lower due to higher captive consumption and non availability of ships due to strike in Venezuela. This impact was offset in part by higher selling prices primarily due to better market conditions.

At Ispat Europe, there were marginal increases in both selling prices in Euro and volumes. Further, the appreciation of Euro against the US Dollar by 12 percent contributed to increase in Net Sales

The company continued to be negatively impacted by increases in the prices of key inputs such as raw material and energy. However, these cost increases were partly mitigated by ongoing cost saving efforts. This was due to the benefits of ongoing cost saving efforts offset in part by increased scrap prices.

At Ispat Mexicana, costs were marginally lower due to increased production offset in part by higher metallic prices and higher energy costs.

At Ispat Sidbec, cost increased primarily due to increased cost of metallic inputs offset in part by better raw material input mix and ongoing focused cost reduction effort.

At Caribbean Ispat, cost of steel decreased primarily due to increased production as against the comparative period. DRI cost decreased mainly due to better ore mix offset in part by higher energy costs.

At Ispat Europe, costs continued to be negatively impacted by increases in the prices of key inputs such as metallics and energy. Other increases include wage increases as per collective agreement. These cost increases were partly mitigated by ongoing cost saving efforts.