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CARACAS,
MAY 4, 1998... International Briquettes Holding (IBH), producer
of Hot Briquetted Iron, reported sales for the first half of fiscal
year 1998 of US$ 44.4 million, according to the financial statements
prepared using US GAAP. Operating income totaled US$ 6.7 million
and net income was US$ 8.8 million. For the first half of the
preceding fiscal year, pro-forma sales were US$ 39.7 million,
operating income was US$ 8.6 million and net income was US$ 8.4
million.
Due to the fact that IBH did not exist in 1997, the first half
and second quarter 1998 financial results of IBH included in this
report are compared to the corresponding 1997 pro-forma statements.
All the comparisons included in this report refer to such pro-formas.
For the second quarter of the fiscal year, sales were US$ 23.9
million compared to the US$ 18.4 million reported in the same
period last year. Operating income for the period was US$ 3.7
million, a reduction of 14% when compared to the US$ 3.4 million
recorded in the comparable quarter of fiscal year 1997. This reduction
in margin is mostly attributable to two factors: first, an increase
in the use of pellets in the feed mix during this quarter, thus
elevating the costs, and second, an increase in gas prices, according
to the government formula that will allow the gas price to reach
US$ 55 cents per million BTU by the month of June.
Net income rose from US$ 3.9 million reported in the same period
last year to US$ 5.9 million. This increase is attributable to
interest income earned, lower taxes paid and a profit of US$ 560
thousand from the equity participation in the IBH/BHP Joint Venture.
It is important to note that the IBH financial statements consolidate
the Venprecar subsidiary, while the joint venture companies with
BHP are reported using the equity method.
For further information, Venprecar and Operaciones RDI sales figures
are presented below:
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The
weighed average prices of HBI for Venprecar and Operaciones RDI
increased 4% between the current quarter and the comparable quarter
last year, rising from $127.78/MT to $132.88/ MT. This improvement
is due to the increase in high quality scrap prices in the United
States since October 1997.
The civil works of the Orinoco Iron Project for the construction
of a briquette plant using the Finmet technology started during
the month of December. As of March 31st. the project was on schedule
and 34% completed, with a total of US$ 395 million invested.
International Briquettes Holding (IBH) is a company dedicated
to the production of iron ore briquettes to be traded mainly in
foreign markets. The company holds 98.9% of Venprecar and 50.0%
of Operaciones RDI. Its operation's strategic location takes advantage
of the cost benefit of the most important inputs like iron ore
and natural gas. It is currently building a 2.2 million MT plant
in the joint venture with the Australian company BHP. This plant
will begin operations in the last quarter of 1999 using the FINMET
technology.
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