Corus hits back at City and its industry critics

Corus has hit back at press speculation surrounding its poor financial condition over the past few months and industry fears that its delivery performance might drop off.

"Corus has come through a period of major restructuring over the past two to three years with its balance sheet intact and it is probably stronger than any other steel company in Europe," said David Jackson, director of Corus corporate relations.

"The construction market is Corus' largest single sector and we remain wholly committed to the continued service and performance levels required in order to meet the ongoing needs of the various supply chains involved," said Jackson.

Things started to go wrong for the Anglo-Dutch steelmaker in September when it announced a pre-tax loss of £234m for the six months to the end of June, causing its share price to fall nearly 8% to 50.75p. The company said a downturn in the carbon steel production market accounted for a large part of the overall loss.

In early November, Corus cancelled its planned £2.7bn acquisition of Brazilian steelmaker Companhia Siderurgica Nacional (CSN), blaming economic uncertainty. The news dismayed investors and shares closed down 27% at 34p on 13 November.

"We believe that markets over-reacted following our announcement on the 13 November that we were withdrawing from the CSN transaction," said Jackson.

He added: "Corus has taken the necessary painful action that many of its competitors may need to take in the future."

As CJ went to press, Corus was sliding closer to a FTSE 100 exit after the postponement of its decision to sell its Dutch aluminium arm to Pechiney of France raised questions over the ability of Corus' management to close deals. The share price as CJ went to press was 29.5p.