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2 May 2011

DanSteel A/S faces positive future

Improvement of the result of primary operations in 2010 in comparison with 2009 by 165 million DKK with the result of primary operations minus DKK 8 million. The result is not satisfactory taken alone; however, when taking the economic crisis and the resulting market situation into consideration, we find the results for 2010 satisfactory. This was the conclusion drawn at the Board meeting at DanSteel A/S held April 29, where the financial statements for 2010 were approved.

DanSteel A/S experienced in 2010 that the increase in the demand was much lower than expected at the beginning of the year and as a consequence of this, the whole steel market has continued to suffer from a competitive pricing environment during 2010. It was not until late in the year that the demand for steel plates and the price level showed an increase. With regards to the raw materials, there has during the year been a strong increase in the price of slabs (raw steel), which during the year has put a strong pressure on the profitability.

The upward trend in the market is one of the indicators of positive results in the coming year. Another indicator is that DanSteel A/S is now beginning to see the results of the recent years’ focused efforts within the higher steel grades, such as boiler steel and off-shore qualities, as well as to build up a strong position in the off-shore wind turbine market, which is a niche with relatively few competitors. Though, this segment was also affected by the lack of financing in 2010.

DanSteel A/S holds on to its strategy and investment plan in spite of the financial results for the year and in 2010 alone, DanSteel A/S has made investments of DKK 63 million. Furthermore, DanSteel A/S has in the beginning of 2011 started the investment in a new and modern stronger and wider rolling stand, which is expected to be completed in 2012. This investment, which amounts to approximately DKK 750 million, will strongly contribute to the continued strengthening of DanSteel A/S’ competitive power.

The expectations for 2011 are positive compared with 2010, and DanSteel A/S’ Management foresees positive results from primary operations in the range of DKK 20–25 million, arising from larger sales and increasing market prices as intense efforts are ongoing to develop and increase the company’s resources in order to follow the development in the company’s present and future markets.