VSŽ raises profits, cancels bond issue

Slovak steel maker VSŽ Holding a.s. said on July 29 it had posted first half pre-tax profits of 933 million Slovak crowns ($26.9 million) compared with 543 million Slovak crowns in the same period last year. Julius Rezeš, the president of VSŽ, said he was pleased with the first half results but cautioned that market conditions, especially in Europe, may not be favourable in the second half of the year. "We expect lower prices in the second half because of excessive supply of materials from Asian and European producers. The first signs of recession were visible in June and we expect more recession in the third and fourth quarters," he told journalists. Rezeš added that after tax profits in the first half were 451 million crowns compared with 398 million in the first half last year and that revenues were 30.191 billion crowns versus 28 billion.

On the same day, the company announced it had postponed a bond issue of up to $150 million but did not say why. "We are still working on all the material required for the issue. All I can say now is that the bond is postponed," VSŽ vice president for finance Pavol Miskov told journalists. VSŽ said in April that they expected to issue the bond by mid-July. ING Barings and Chase Manhattan had signed a mandate agreement as lead managers to issue up to $150 million of bonds of up to seven years maturity.

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