Corus forges ahead despite Russian interest STEEL:
Philippe Varin, chief executive of Corus, vowed yesterday to press on with
the company's restructuring effort. This was in spite of the attentions
of two Russians metals tycoons who have built up sizeable stakes in the
Anglo-Dutch steelmaker.
Mr Varin was speaking after the company announced a large drop in operating
losses last year, and said it was cautiously optimistic about 2004.
"We don't want to give the impression to our employees that we are
dependent on (outside groups) for what we are trying to achieve," he
said.
Corus has been in financial difficulties virtually since it was formed in
1999 - the company was created from a merger between British Steel and
Hoogovens of the Netherlands.
It has emerged that Alisher Usmanov and Oleg Deripaska, two of Russia's
best-connected metals magnates, have built up a combined stake of between 11
per cent and 14 per cent, and the pair might be keen to influence the
company's strategy.
In the year to January 3, Corus suffered a pre-tax loss before restructuring
charges of Pounds 113m, compared with a deficit of Pounds 351m on the same
basis the previous year.
Operating losses were cut to Pounds 208m, against Pounds 446m last time,
while the pre-tax profit, leaving in restructuring costs, was Pounds 255m
(loss of Pounds 404m). Sales increased 11 per cent to Pounds 7.95bn (Pounds
7.13bn) on higher steel prices worldwide. Losses per share narrowed to 9.25p,
compared with 14.23p.
Net debts were cut to Pounds 1bn (Pounds 1.2bn) while operating cash-flow
jumped to Pounds 224m (Pounds 41m).
Mr Varin - who joined the company in May - has set in train a series of
initiatives involving extra investments and the sale of some plants that he
hopes will lead to extra underlying profits by 2006 of between Pounds 600m
and Pounds 700m.
He said this would "close the competitiveness gap" between Corus
and other European steel rivals.
Mr Varin said he did not want to comment on whether he had spoken to either
of the two Russians in the past few weeks, during which Mr Usmanov - who has
a stake of 11.03 per cent - has said he wants to have a seat on the board.
However, Mr Varin said he frequently met shareholders with large stakes and
the ones he spoke to were "generally supportive of management".
Asked whether Corus could organise a joint venture or other deals with the
Russians, Mr Varin said he did not want to comment directly, but added:
"I exclude nothing down the road."
Mr Varin said Corus was in talks with various groups about selling its small
aluminium division, but was under "no pressure" to find a buyer
quickly.
The company's shares fell 2 3/4p yesterday to 38 1/2p. See Lombard
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