The Group’s principal activity during the year remained the international trading and distribution of steel and steel making raw materials.
2019 Highlights:
- Sourcing and delivery of 3.1mt of steel and raw materials during the year, an increase of 5% from a year earlier;
- Total revenue of US$1.743bn in 2018 (FY2018: US$1.927bn) impacted by:
- higher proportion of raw material shipments; and
- a reducing price environment.
- Gross Profit of US$68m, before exceptional items;
- Gross margin at 3.9% (FY2018: 5.3%);
- EBITDA1 for 2019 of US$19m (FY2018: US$39m);
- Profit before tax, derivatives and transaction costs2 of US$8m (FY2018: US$16m) with lower pricing environment offset by:
- reduced overheads of US$50m (FY2018: US$64m); and
- a further shift to more cost-effective financing facilities – US$6m reduction in financing costs achieved in 2019.
- Continued optimisation of the Group’s financing structure, with c.US$960m of available working capital financing, made up of over US$620m of bilateral trade finance and c.US$340m of local borrowing base facilities; and
- Work to complete the transaction for the purchase of the entire share capital of Stemcor by Cedar Holdings Group Ltd (“Cedar”) continues to progress well;
Steve Graf, CEO of the Stemcor Group, commented:
“The Group faced a number of external challenges to the business throughout 2019, from a softening global economy, declining industrial activity, continuing Brexit-EU and trade war uncertainty and increasing levels of protectionism. Despite these factors and the ensuing commodity pricing volatility, we were able to ship and invoice over 3 million metric tonnes and deliver a solid, profitable annual result thanks to the tireless efforts of all in our organization. Preliminary work with key lenders on raw material trade finance developed traction as the year progressed and contributed to activation of new trade flows and increased tonnes across Half 2.
The acquisition of the Stemcor Group (SGHL) by Cedar Holdings, announced in January remains on track for a summer closing.”
1. Operating profit before exceptional & restructuring items, transaction costs and depreciation
2. Profit before taxation, movements on financial assets and liabilities at fair value through profit and loss and transaction costs