Annual report 2019

15 Železiarne Podbrezová a.s.: ANNUAL REPORT 2019 and 69 368 tonnes of rolled tubes were further processed by Železiarne Podbrezová. In the 40th year of operation, there was a record-breaking monthly production in the rolling mill: we produced 19 200 tonnes of rolled tubes in March. In 2019, we again made significant technological investments in the tube rollingmill.Wecontinued the project of application of hard-metal rollers in the baskets of the push bench and in the stands of the drawing reduction mill to extend the roller life and improve the surface quality of tubes. Our long-term cooperation with ŽP Výskumno- vývojovécentrum(ŽPResearchandDevelopment Centre, ŽP VVC) involved measurement, analysis and adjustment of the surface temperatures of rollers in the stands of the drawing reductionmill by changing their cooling parameters, which led to increased tool life and improved homogeneity of structure and mechanical properties of tubes. In the first half of the year, we completed a new finishing line in the dispatch warehouse, which performs straightening, marking, packaging and weighing activities in automatic mode and increases the finishing capacity of the tube rolling mill. During the December shutdown, we made three very important investments. The first was the installation of new shears for dividing continuously cast blooms. The second significant investment was the transition to a 3-piece toothed bar and the replacement of related parts, which strengthened the entire system and we believe that it will extend the life of this strategic part of the rolling mill. The third investment was the complete replacement of the hearth of the carousel furnace. In December, we also started preparatory construction work for the construction of a new treatment line for tube processing. This automated line will optimise the flow of products, reducing the need for handling and increasing the surface quality of tubes. We plan to complete the installation during the next shutdown in December. In 2019, we produced 50 702 tonnes of cold- drawn precision tubes, a decrease of 3 401 tonnes comparedto2018.Theplannedproductionvolume washigher by approximately2.5 thousand tonnes (5%). In 2019, we sold 50 982 tonnes of precision drawn tubes to external customers, of which 1 253 tonnes were with a galvanised finish and 1831 tonnesweredividedandhydraulic tubes. The demand for precision drawn tubes was stable in most key product groups. In 2019, we again made several investments in the tube drawing mill. We installed and launched the third tube division system directly on the drawing bench. We intend to install division systems on at least three more drawing benches. We installed an automated line for small diameter tubes, which performs all finishing operations at one workplace. Last year, we also started to prepare the treatment grate so that after completion it will be possible to perform several operations related to inspection, cleaning, weighing and packaging of tubes. Continuously cast blooms, seamless hot-rolled tubes and precision cold-drawn tubes accounted for over 99% of the total production of Železiarne Podbrezová a.s. in 2019. Other products – butt welding elbows and reducers comprised a supplementary product range. In 2019, we produced 2 603 tonnes and sold 2 436 tonnes of welded elbows and 75 tonnes of reducers to our customers. In 2019, supervision audits according to ISO 9001:2015 and IATF 16949:2016 were performed as part of the quality management system at Železiarne Podbrezová a.s. Both audits were successful and we retained our certificates, which showed that the production processes are verified and in compliancewith the requirements specified in the relevant standards. We also passed the environmental management system supervision audit according to EN ISO 14001:2015 and the recertification audit of the occupational safety management system according to ISO 45001:2018. In 2019, we sold products, merchandise and services to our customers in the total amount of EUR 251 057 thousand, of which 90% were exported. Compared to the previous year, revenues decreased by EUR 39 875 thousand EUR (13.7%) due to lower selling prices of rolled and precision drawn tubes and a significant drop in the volume of sales of steel blooms. REPORT BY THE BOARD OF DIRECTORS ON BUSINESS ACTIVITIES, ASSETS AND FINANCIAL PERFORMANCE IN 2019 AND INFORMATION ON THE BUSINESS PLAN