Mittal confirms $0.5bn profits in Galati

Mittal Steel Galati made net profits of 429 million dollars (around 14,000 billion ROL) last year, a record high among companies on the Romanian market.

The profits reported for 2004 come close to the total value of the privatisation contract for Sidex Galati in 2001 of 500 million dollars, which included the price paid for shares (around 70 million dollars) and investment pledges over a period of 10 years. The Romanian state also granted a series of incentives to the Indian buyers of Sidex, part of which were withdrawn at the end of last year, including state aid.

“2004 was a very good year for the steel market. Mittal Steel Galati was very well positioned to benefit from the excellent market conditions and managed to derive high profits thanks to its efficient cost structure and rising productivity. Nevertheless, maintaining high profits is quite difficult because the steel market has come under a lot of pressure and costs for raw materials have risen in 2005,” K.A.P. Singh, chief executive officer of Mittal Steel Galati, told Ziarul Financiar.

The Indian owners of Mittal Steel have managed to boost steel production at Galati, as well as exports to Asian markets, especially China, where demand has grown strongly. The main drive behind the growth in profits, however, has been the continuing high price of steel on international markets.

The record high figures reported by the complex in Galati for 2004 will be followed by the first dividends from derived profit, according to the newspaper Monitorul de Galati, which was first to publish the company”s results. Mittal Steel is the world”s largest steel producer and is owned by Lakshmi Mittal, one of the wealthiest businessmen in the world. In less than four years, Mittal has managed to reverse the situation at Sidex Galati from one of losses in the hundreds of millions of dollars to one of net profits of half a billion dollars.

Mittal Steel Galati”s turnover last year was worth 2.1 billion dollars. Turnover is expected to rise to 3 billion dollars this year.