Annual report 2017

2017 ANNUAL REPORT Železiarne Podbrezová a.s. 14 own production of steel tubes and 96 380 tonnes were sold to external customers. We positively assess the past year’s development of key operating indicators, i.e. the melting loss and production downtimes. As in previous years, we implemented several technological changes and innovations in the steel plant in 2017. In Q1 2017, we started standard production of our smallest format – the 105 mm square. As one of the few producers, we produce it by closed casting using submersible tubes. We adjusted the quantity of water in the secondary cooling of continuous steel casting equipment when casting the highest boiler steel quality to increase the internal quality of continuously cast billets. In 2017, we cooperated with our R&D centre, ŽP Výskumno-vývojové centrum, s.r.o. (ŽP VVC s.r.o.) and analysed the quality of submersible tubes and, based on the results, we increased the number of melts in one casting sequence. In 2017, the tube rolling mill produced a record-breaking 207 571 tonnes of tubes, of which 134 555 tonnes were available for sale to external customers and 73 016 tonnes of rolled tubes were further processed by Železiarne Podbrezová a.s. This is an increase by 33 871 tonnes (19.5%) compared to 2016. We continued implementing our technological innovations in the rolling mill in 2017. In 2017, hard-metal rollers were used in the baskets of the push bench, which significantly extended the roller life and the surface quality of tubes. We cooperated with ŽP VVC on measurements and analyses of the surface temperature of rollers in stands and we changed the cooling parameters. This cooling optimisation will continue in 2018 to achieve higher rolling finish temperatures and improved structural and mechanical properties of rolled tubes. In the first half of 2018, we will put into use the automatic setup of meltable baskets for faster and more precise setup of individual parts of the rolling line and reduced technological downtime. In 2017, we produced 53 374 tonnes of cold-drawn precision tubes, a record-breaking total length of almost 37 000 km of precision tubes. Of this volume, 52 318 tonnes of precision tubes were sold to external customers, of which 1 309 tonnes were galvanised, 2 155 tonnes of divided precision tubes and 41 tonnes of hydraulic tubes. The demand for precision drawn tubes was stable in most key product groups of the tube drawing plant: standard, construction, exchanger and boiler tubes, and tubes for hydraulic and pneumatic piping. One of the most important investments in technological innovation was the installation of an additional system for tube division directly on the push bench. This initiative will continue next year and we plan to install the same division system on another push bench. In 2018, we also intend to put into use a new finishing line that will perform all operations from straightening to packing in one line. Continually-cast billets, seamless hot-rolled tubes and precision cold-drawn tubes accounted for over 99% of the total production of Železiarne Podbrezová a.s. in 2017. Other products –– butt welding elbows and reducers comprised a supplementary product range. In 2017, we produced 2 049 tonnes and sold 2 162 tonnes of butt welding elbows and 58 tonnes of reducers. Sales of main products in 2017 Total sales of products Slovakia - 6% Export - 94% Tonnes EUR ‘000 Share in sales Tonnes EUR ‘000 Tonnes EUR ‘000 Steel billets 96 380 44 289 20% 23 12 96 357 44 278 Seamless hot-rolled tubes 134 555 102 532 45% 10 293 8 606 124 262 93 925 Precision seamless cold-drawn tubes 52 318 75 577 33% 3 517 5 314 48 802 70 263 Butt welding elbows and reducers 2 220 3 605 2% 76 144 2 144 3 462 Company store (1) 305 314 0% 305 314 0 0 Total 285 778 226 317 100% 14 213 14 390 271 565 211 928 (1) Retail of seamless and welded tubes and butt welding elbows. REPORT BY THE BOARD OF DIRECTORS ON BUSINESS ACTIVITIES, ASSETS, AND FINANCIAL PERFORMANCE IN 2017 AND INFORMATION ON THE BUSINESS PLAN