Standout Performance By New Zealand Steel

August 23, 2005

STANDOUT PERFORMANCE BY NEW ZEALAND STEEL - A very smart team performance, says President Bill Jacob

New Zealand Steel produced its third consecutive record performance to contribute A$183 million, earnings before tax and interest (EBIT), to the result of its parent company, BlueScope Steel, for the year to June 30, 2005.

New Zealand Steel President Bill Jacob said the New Zealand company’s EBIT performance was 195% better than the previous year (A$62 million), driven by production improvements, savings in supply costs, and record sales of non-steel items.

The New Zealand business had total revenues of A$756 million compared to A$560 million the previous year.

“While our results must be seen in the context of the unprecedented global steel market, they go beyond that to reflect an improved total performance, based on productivity improvement, cost controls and new revenue streams.

“We produced a record 217,000 tonnes in metal coating, there was increased capacity in the paint line; and a good portion of our EBIT came from the sale of non-steel items.”

“In line with our zero-waste policy we have developed markets for many of our previous ‘problem’ steel-making by-products, including vanadium slag. We have also increased sales of ironsands to China which have provided an enormous revenue boost beyond our traditional steel-marketing activities.”

Bill Jacob said that in every respect New Zealand Steel’s result was due to “very smart team performance” confirming a remarkable turnaround for a manufacturing business over which there was once a very big question mark.

Mr Jacob reflected that “New Zealand Steel’s performance is even more remarkable when it is recognized that the average NZD/USD exchange rate was 0.70 compared to 0.63 in the previous corresponding period, and the business also faced higher utility costs. We are also pleased with improved focus on customer and supplier satisfaction appreciate their support.”

Record safety performance Aside from its financial performance in the year to June, New Zealand Steel also turned in a record safety performance, with a Lost Time Injury Frequency rate of 0.6 (50% improvement on previous best) and a medically treated injury frequency rate of 5.3 (a 15% improvement on previous best).

Bill Jacob said he and the entire workforce were mindful that only a few days into the current year (July 4) they lost a colleague in a tragic accident at the plant. “We have enjoyed some success with our safety journey, and this fatality, and indeed every safety incident in our business – is a stark reminder that the journey continues.”

ENDS

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