In 2008, the global financial crisis and its consequences inevitably affected SIDENOR Group's activity and results. The Group results, especially at the end of 2008, have been adversely affected by the unexpected negative financial environment, which also affected all industry peers and most sectors of the world economy, via the sluggish construction activity (due to the cutbacks of investments in the construction sector) and the dropping metal prices globally.
More specifically, consolidated turnover in 2008 stood at 1,713 mil. Euro over 1,390 mil. Euro in 2007, posting a 23% increase as a result of increased sales volumes and prices, in addition to the operations of the new rolling mill of subsidiary STOMANA INDUSTRY. Consolidated profit before tax formed at 47.4 mil. Euro versus 138.5 mil. Euro in 2007. Group EBITDA amounted to 140 mil. Euro versus 213 mil. Euro in 2007. Finally, profit after tax and minorities formed at 29.3 mil. Euro (or 0.30 euro per share) versus 91.6 mil. Euro (or 0.95 euro per share) in 2007.
The significant drop of the results is attributed to the sharp drop of steel and scrap prices during the fourth quarter of 2008 due to the financial crisis, which in addition to the diminishing margins, forced the Group to proceed to inventory revaluation at the end of the year by the amount of 60.3 mil. Euro.
Regarding SIDENOR Group's steel products division (excl. CORINTH PIPEWORKS), the corresponding turnover marked a 29% increase versus 2007 due to increased sales volume and prices, while EBITDA marked a 30% decrease approximately.
Noteworthy is the fact that there has been a substantial decrease of SIDENOR Group's debt by a total of 139 mil. in the fourth quarter of 2008, as a result of the drop of steel prices combined with effective working capital management. The Group cash flows, as well as the debt levels are expected to follow a similar favorable pattern in the first quarter of the current year.
As far as it concerns the Group's activity in the broader South East European region, the slowdown of growth and investments in this region is solely due to the rigid and stringent credit policy adopted by the financial institutions, combined with the substantial reduction of financing of the projects' development in the area. Despite the above, the Group strongly believes that the prospects remain positive, in view of the needs for development and further modernization of these economies.
SIDENOR Group, in order to ensure and enhance its current position both in the Greek, as well as in the SE European markets and in support of its expectations, constantly and reliably applies its policy for cost reduction, productivity improvement and streamlining of its inventory management, as well for its working capital requirements, taking always into account the prevailing conditions in the domestic and the international markets.
Finally, the Group's management, after careful consideration of the unprecedented and highly volatile adverse conditions due to the global financial crisis and in order to secure the Group's liquidity, will propose to the Annual Ordinary General Meeting of its shareholders the non-distribution of dividend for fiscal year 2008.