Annual report 2012

35 The second pillar of our business plan includes heavy- engineering and metallurgical products. ŽĎAS, a.s. in Žďár nad Sázavou and TS Plzeň a.s. have formed a duo that ranks among the top heavy-engineering and metallurgical companies in the Czech Republic and have won worldwide recognition. This significant cooperation will allow the further use of the synergic effects resulting from the dominant position in the shaping machine supplies sector. Both companies have sufficient work contracts for 2013 tomeet their business plans and to contribute to improving the consolidated results of ŽeleziarnePodbrezová a.s. The business activities in tourism, which is the third pillar of our business activities, are now fully integrated in the subsidiary, Tále a.s. We want to continue developing this area. By enhancing the technical standards of the sports resort and its efficient operations, we aim to improve still further the services rendered and to strengthen our reputation among a wide range of customers. In 2013, we are building a small 9-hole golf course, creating new opportunities for youth training, aswell as for commercial use. The scope of Železiarne Podbrezová a.s.'s business activities is also supported by the activities of other subsidiaries and associatedundertakings, which contribute to the consolidated economic results. Upon meeting the planned revenues from the sale of merchandise, products and services at the consolidated group level in the amount of EUR 470.8 million, we expect to generate a consolidated profit attributable to ŽeleziarnePodbrezová a.s. in the amount of EUR9.1million. CONCLUSION In the recent history of Železiarne Podbrezová a.s., the Company's 2012 profit is considered rather average. However, the Company's Board of Directors assesses this year positively as the profit was generated under much tougher economic conditions. New sales opportunities arose only occasionally and the supply exceeding demand, especially in the European territory, created a permanent pressure on the decrease in selling prices. In contrast, the pressure on the increase in the price of the basic raw materials (steel scrap) grew in a non- transparent fashion due to the unfavourable balance situation in Eastern Slovakia. Therefore, the return on sales of 2.7% in 2012 is considered success of the management and the entire working team. In 2012, the average monthly salary grew by more than 2.5%comparedwith the preceding year despite the fact that value-added labour productivity decreased by 4.9%, which it iswell belowthepre-crisis period level. The 2012 profit/(loss) is a profit of EUR 7 022 286. Earnings per share amounted to EUR 2.95. Althoughwe decided to invest in the modernisation of technological facilities in 2013 and subsequent years to enhance the Company's competitiveness, we propose that the General Meeting also distribute the reportedprofit to thepayment of dividends to shareholders. Subsidiaries and associates also actively contributed to the results of Železiarne Podbrezová a.s. Revenues from sales within the consolidation group amounted to EUR 499 664 thousand. The profit of EUR 10 838 thousand is attributable to Železiarne Podbrezová a.s. as a consolidating company. In 2012, the Company's results of operations did not reach the pre-crisis period levels. However, it remains a guarantee for the co-operating small andmedium-sized entrepreneurs in the region. The adequate utilisation of production capacities enabled the Company to maintain employment and thus the income of the population in the region. Železiarne Podbrezová a.s. re-bolstered its position as the most significant employer and remained a guarantor of social security in the Brezno District and theentireBanskáBystrica region. As regards the overall assessment of the past year, the economic and financial crisis in the preceding years strengthened rather than significantly weakened the Company. The experience gained in many areas serves as a lesson and the austerity measures taken will continue to bringeconomic effects. Thanks to its great flexibility, Železiarne Podbrezová a.s. is constantly prepared to react dynamically to new business opportunities. The Board of Directors of Železiarne Podbrezová a.s. wishes to express its gratitude and appreciation to all colleagues, as without their contribution these results could not have been achieved. Additionally, we would like to extend our thanks to our suppliers, customers, banks and financial institutions, and to all our business partners for their cooperation. We wish to continue inpromotingour goodbusiness relations in future. We appreciate your confidence. Approvedby theBoardof Directors' decisionon10May 2013 ŽELEZIARNE PODBREZOVÁ A.S. ANNUAL REPORT 20 12 REPORT BY THE BOARD OF DIRECTORS ON THE BUSINESS ACTIVITIES, ASSETS, AND FINANCIAL PERFORMANCE IN 2012 AND INFORMATION ON THE BUSINESS PLAN