The financial year ended on 31/12/2003 closed for MYTILINEOS HOLDINGS S.A. with an impressive increase in profitability.

The consolidated earnings before tax increased by 58.5% reaching euro 27.810 m compared to euro 17.595 m in 2002.

It should be noted that under the International Accounting Standards the pro-forma consolidated financial statement of the Group shows sales of euro 453.1 while EBITDA and net profit before taxes will be set at euro 64.4 m and euro 42 m respectively. The consolidated financial position will include the full consolidation of ELVO, estimated to be announced by the end of March.

Under the Greek Gap and Law 2190/20 the Group's turnover has increased by 7.10% compared to 2002 reaching euro 278 m (c.f. euro 259 m in 2002) despite the negative effects of the sliding of US dollar VS euro on the metals hedging activity. However, this effect has been moderated by the price increase in the basic metals.

The considerable improvement of the Group's profitability has been attributed to the increase of the Gross profit margin from 18.74% to 19.26%, to the containment/reduction of the operational and management expenditure as well as to the reduction of the financial expenditure.

Special reference should be made to the impressive increase of the profits before taxes after minority rights by 85.97% reaching euro 23.278 m compared to those of euro 12.517 m in 2002.

On the side of the consolidated balance sheet one should note, the reduction of the Group's networth which has been the result of the restructuring of the assets of the holding company, after substantial provisions regarding delayed claims, as a first step of compliance with the International Accounting Standards.
Yet, for one more fiscal year, the Group has reduced further its borrowings by euro 10 thus maintaining the debt ratio to low levels. This reduction was accompanied by a considerable restructuring (The percentage of the long-term loan to the total was increased from 30% to 60%). The containment of the lending cost in low levels of 3% all-in, as well as the fact that 70% of the loan is in USD, should be also emphasized.

As far as the mother company MYTILINEOS S.A. is concerned, the profitability has considerably increased during 2003.

The profits before taxes increased by 54.85% reaching euro 9.458 m compared to euro 6.107 m of last year, despite the small recession (-5.6%) in absolute number of sales, resulting from the contemporary fall of the dollar exchange rate.

The increase in profits should mainly be attributed to the improvement of the gross profit margin from 9.63% in 2002 to 10.22% in 2003, as well as the profit margin before taxes from 3.96% to 6.5%.

The management operational expenditure has been sustained to the same level as last year whereas the bank debt was reduced by approx. euro 12 m.

ΕLVO's results have been also impressive. ELVO, a subsidiary of the Group, is not fully consolidated in the Group's accounts but is incorporated by the method of the net worth.

ELVO has reported sales increased by 42%, outreaching euro 175 m (from euro 123.623 m in 2002), gross profit increased by 69.72% from euro 24.917 m to euro 42.040 m while profits before tax shot to euro 21.903 m, making a 150% increase compared to last year (euro 8.727 m).

The increased profitability is mainly attributed to the applied intensive production cost control. During the fiscal year 2003 the gross profit margin reached the level of 23,9% compared to 20,15% in 2002. Respectively the margin on the earnings before tax posted a substantial increase during 2003 reaching the level of 12,48% Vs 7,05% in the previous year.

The current back-log of the company exceeds the amount of euro 700 m including the Kentauros armored vehicle project, total worth of euro 400m, for which the production was assigned to ELVO by April 2003 but however is delayed since the order has not yet been activated. Bank debt was maintained in relatively low level taking into account the increased needs for capital due to the reported growing sales figure.

METKA group posted a remarkable increase in revenues of 34,24%, euro 142,755 in 2003 Vs euro 106,340 in 2002, while the earnings before tax exceeded the amount of euro 20m in 2003 compared to euro 16,4m the previous year, representing an increase of 24,27%.

It should be noted that ΜΕΤΚΑ currently holds a euro 460 mn of back-log in which the energy projects of the Group are not included. The above figure includes the construction of PPC's gas-fired plant (offered price euro 190 mn, 400 MW) in Lavrio where METKA will act as EPC contractor.

Finally, the dividend of Mytilineos S.A. will be euro 0,10 per share (an increase of 100% in comparison to the last year) and the dividend of METKA S.A. will be euro 0,16 per share (similar to the dividend of the previous fiscal year).

The prospects of the Group for the fiscal year 2004 are quite optimistic. The metal prices increase, which has started at the end of last year and is expected to be sustained in the years to come, in combination with the increase in demand will have a positive effect in the metallurgy sector of the group.

In the energy sector the Group received early this year the installation permit to construct and operate the first private power plant (400 MW CCGT) in Volos. The above plant is identical to the Lavrio power plant and will be constructed also by METKA. In addition construction of two wind farms of a total capacity of 27 MW is set to begin in 2004 and their operation should commence 18 months later while the Group has currently been investigating the possibility to expand in power generation of neighboring countries.

Finally in the defense sector the Group awaits the materialization of several co-production agreements with the Ministry of Defense including the production of the KENTAVROS Armored Infantry Fighting Vehicle (AIFV) which will secure ELVO's competitive position and its bright future.