TŽ Annual Report 2008 in pdf, 7.5 MB - Třinecké železárny

7.Introductory Word of the Chairman of theSupervisory BoardDear Shareholders, Customers, Partners, and Employees,The year 2008 showed us two faces. The first favourable one lasted over the first threequarters of the year and continued the previous extremely successful period. The secondone was characterised by a considerable drop of demand as a consequence of the financialcrisis. Despite the difficulties brought by the crisis, we succeeded in achieving profit beforetaxation in the amount of CZK 1.517 billion, that is about one third compared to theprevious year, which stands as a record success.The level of added value also decreased to CZK 5.94 billion, which is a drop by 25.5 percentcompared to 2007. The sales of our products declined by 3.8 percent to the level of 2,301 kilotonnes year-on-year.The global financial crisis, which started in the second half of 2008, perceivably hit Europe as well as the CzechRepublic in the last quarter of 2008. As the statistics and forecasts of the World Steel Association show, the automotiveindustry, a significant market segment for our products, faces extensive problems. Steel consumption dropped by morethan 20 percent on a year-on-year basis in the automotive segment. The price index plummeted by 40 percent from themaximum values of summer 2008. The year-on-year decline in global steel production was 27 percent.These trends will continue in 2009. Even optimistic forecasts do not expect improvement earlier than at the end of 2009.The return to the level of previous years will be slow and it could even last several years.These circumstances define the situation we are now facing. Nevertheless, the financial results of previous years arethe guaranty of surviving the period of crisis. Successfully coping with the crisis is also credited to the foresightedmanagement of Třinecké železárny and the devotion of our employees.The investment activities of 2008 were both well planned and successfully managed with regard to the crisis. Our Groupincreased by two companies whose production fit into our strategy of downstream product chains. We completed the10