Annual Report 2004

ANNUAL REPORT 2004 Ž E L E Z I A R N E P O D B R E Z O V Á 3 THE WORD FROM THE CHAIRMAN OF THE BOARD Dear Shareholders, Before I inform you of the business results of Železiarne Podbrezová a. s. ("the Company") in 2004, I would like to begin by briefly commenting on the business circumstances we faced during this period. 2004 was a record breaking year in the metallurgy industry. After decades of relatively low prices, the prices of metallurgy products have increased significantly in the second quarter of 2004 due to the increased competition of three economics Powers - Europe, America and Asia. The Asian demand resulted in huge price increases of scrap steel, iron ore, coke coal and ferro-alloys, all important additives in steel production. Despite these circumstances which negatively influenced our business results, 2004 was extremely successful. Our sales mangers responded to the price increase of raw materials quickly and effectively. In the second quarter, our prices were adjusted to reflect the increase in raw material prices and these prices were accepted by customers. The Company's profit after tax of 222 million SKK is a good indicator of our successful business activities. Asset management was improved and financial resources were invested into fixed assets, investments and assets maintenance in accordance with our business plan. Considering the success in the past, the Board of Directors will submit a proposal for dividend payments during the General Meeting. With satisfaction, I would like to comment that cooperation with financing institutions was very good in 2004. I also appreciate the respectable attitude of our customers to settle their liabilities to us on time. This resulted in working capital improvements in 2004. I am sure that the positive results achieved in 2004 are a good stepping-stone for the successful start of 2005, which has now already been partly confirmed. I would like to express my gratitude to everybody who contributed to the achievements of Železiarne Podbrezová a. s. I wish to all, success in their private and professional lives. May I express my belief that the business results of Železiarne Podbrezová a.s. will meet our expectations in the next five to ten years. Ing. Vladimír Soták Chairman of the Board of Directors and General Director