FINANCIAL SNAPSHOT

FINANCIALS

• Statutory net profit after tax $230 million, down 6%.
• Underlying net profit after tax $215 million (market guidance around $200 million), down 32%, breakeven for second half.
• Underlying earnings before interest and tax $461 million, down 25%.
• Strong start to the year, but the last nine months were affected by the Global Financial Crisis.
• OneSteel responded swiftly to reset the cost base and strengthen its balance sheet.
• Debt maturing in 2009 refinanced early.
• Achieved targeted reduction in inventory and working capital including a $120 million per annum reduction to the cost base through a labour reduction program as at mid–August with $160 million estimated by December 2009.
• Raised additional $789 million of capital in equity raising.
• Increased iron ore sales to 5 million tonnes and sales capacity to 6 million tonnes per annum.
• Completed integration of the former Smorgon Steel business and achieved target net synergy benefits run rate of $100 million per annum.
• Final dividend of 4 cents per share (unfranked) declared. Total dividend for the year 10 cents.

OPERATIONAL

• Solid sales and operational performance for most of the first half.
• Operating performance for the financial year significantly impacted by the Global Financial Crisis.
• OneSteel’s Australian Distribution and Manufacturing segments felt the impact of the Global Financial Crisis from November 2008.
• Iron Ore and Recycling segments felt the impact earlier in first half due to international nature of their markets.
• First half EBIT $401 million, second half EBIT $60 million.
• EBIT/Sales margin down 1.8pts to 6.4%.
• Iron Ore segment achieved volume target with sales of 5.1 million tonnes and lifted sales capacity to 6 million tonnes per annum. EBIT, at $162 million, is down on prior year due to lower prices and foreign exchange volatility.
• Recycling - EBIT breakeven in second half. EBIT loss for the year of $39 million - includes $30 million inventory writedown and $10 million cost from contract renegotiations following fall in commodity prices in first half.
• Manufacturing EBIT down 18% to $161 million due to 24% decrease in volumes, partly offset by higher average price and cost reductions.
• Australian Distribution EBIT up 26% to $185 million due to cost reductions and a strong market early in year.