10 February 2003 Bekaert announces sharp increase in operational performance in its preliminary 2002 results
Bekaert announced today its pre-audited preliminary consolidated results for the full year 2002.
BEKAERT 2002 IN SUMMARY
Results from operations increased by 60 % (before non-recurring provisions).
A record EBITDA (before non-recurring items).
Non-recurring provisions due to restructuring, closure of activities and impairments of approx. 140 million euros, including the restructuring of the Bekaert Fencing activities and the impairment on the solar energy operations.
A consolidated net loss of approx. 50 million euros.
A sharp decrease in net debt.
A proposed dividend of gross 1.68 euro per share, or a yield of more than 4 %.
PRELIMINARY 2002 RESULTS
Bekaert confirms that for the full year 2002 estimated consolidated sales are expected to be above the level of last year in spite of a low dollar. All Major Business Units (MBU) performed better than in 2001.
In the Wire business unit, most segments made progress. High Carbon Specialities increased market share and Low Carbon Specialities performed strongly in nylon coated wires.
Bekaert Fencing showed already improved results due to a better product mix and lower costs.
The Steel Cord business unit performed strongly world-wide and fully reflects the growth potential in China and Brazil.
Bekaert Advanced Materials (BAM), in addition to a good business in Window Film in the U.S. by Bekaert Speciality Films (BSF), showed substantial growth in Bekaert Advanced Coatings and Bekaert Combustion Technology.
Results from operations (excl. non-recurring items) increased by 60 %.
Results from operations, before non-recurring items, are expected to be more than 60 % above the comparable figure of last year. All MBU’s contributed to this higher profit. EBITDA, before non-recurring items, is expected to achieve a record level.
Strict application of IFRS rules leads to an impairment on solar energy operations.
Bekaert announced in its Q3 2002 trading update that its solar energy operations needed more funding than originally foreseen due to higher than anticipated pre-production and marketing expenses and therefore it will take longer to break even. As announced on that occasion, Bekaert and ECD have since started the process to search for a third partner in order to strengthen the Unisolar base.
The Board of Directors of Bekaert has decided to take in its 2002 consolidated accounts a net impairment of 84 million euros on its investments in United Solar Systems Corporation (USSC) and Bekaert ECD Solar Systems LLC (BESS) based on a strict application of the IFRS accounting rules, the recent advice of its Auditors and a due diligence concern for its shareholders.
This impairment is based, according to the IFRS accounting rules, on the value in use of the present facilities only.
The impairment of 84 million euros is allocated to the original investment in USSC,
at cost, the original investment in BESS less accumulated consolidated losses and bridging loans.
This impairment has no impact on cash flow.
Taking into account the good results from operations (excluding non-recurring items and impairments), the record operational cash flow and the outlook for 2003, the Board of Directors will propose at the next General Assembly of Shareholders to maintain the dividend for the year 2002 at the same level of the year 2001, which is a gross dividend of 1.68 euro per share.
The visibility on the economic and geopolitical fronts remains low. After a weaker December month, which was anticipated, order inflow for most activities has resumed at the pre December level.