Annual report 2019

17 Železiarne Podbrezová a.s.: ANNUAL REPORT 2019 PURCHASE OF STRATEGIC RAW MATERIALS AND ENERGY The Company applies ISO standards in business relationships with suppliers of input raw materials and our regular good communication and payment discipline enabled us to maintain a high level of supply activities in terms of quality and delivery times. The gradual decline in demand for steel products and, consequently, production in the industry resulted in a decrease in the prices of input raw materials and alloy additions. The purchase prices of scrap steel and cast iron steadily declined from the beginning of the year and the price fell by almost 30% in 10 months from January 2019 to the low point in November 2019. In2019, we purchased rawmaterials totallingEUR 125 206 thousand, of which 24% were imports. The purchased raw materials consisted of scrap steel, crude iron, cast iron, ferro-additives, refractory materials and important spare parts for production and service facilities. We traded with 885 business partners when purchasing raw materials in 2019. In 2019, we purchased a total of 276 172 tonnes of scrap steel, of which, as in the last year, 90% were supplies from our subsidiaries ŽP EKO QELET a.s. and KBZ s.r.o. In 2019, we purchased a total of 187 859 MWh of electricity, a 13% decrease compared to the previous year. Our small hydroelectric power plants and the co-generation unit produced 62 528 MWh of electricity, and generated 25% of our total annual consumption internally. The purchase price of electricity increased by 3% compared to the previous year. In 2019, we purchased 42 million m3 of natural gas from Slovenský plynárenský priemysel, a.s. for our consumption, which is comparable to the previous year. CAPITAL INVESTMENTS AND CARE FOR TECHNOLOGICAL EQUIPMENT The investment plan for 2019 relies on the medium-term investment plan, which aims to ensure the necessary technological renewal in the near future and to maintain the competitiveness of seamless tube production given the constant growth in labour costs, especially due to shortage of skilled blue-collar workers. Therefore, in the second year of the implementation of the strategic investment plan, we again invested significantly above the current annual depreciation charges, in the total amount of EUR 12 762 thousand. APPLICATION OF TUBES IN 2019 SEAMLESS HOT-ROLLED TUBES PRECISION SEAMLESS COLD-DRAWN TUBES REPORT BY THE BOARD OF DIRECTORS ON BUSINESS ACTIVITIES, ASSETS AND FINANCIAL PERFORMANCE IN 2019 AND INFORMATION ON THE BUSINESS PLAN