No divi as Corus loss hits £237m

CORUS today tried to paint a brighter outlook than its shareholders have grown used to, saying steel prices were continuing to improve in the face of economic uncertainty.

The former British Steel group said production cutbacks, some stock rebuilding by customers and a modest rise in consumption had triggered a turnaround in the depressed market for its products.

Chairman Sir Brian Moffat said these factors would lead to further price rises in Europe in the second half of this year. He added the extent of these gains would depend largely on the strength of the manufacturing recovery in the UK.

Moffat made his more optimistic assessment of Corus's prospects after revealing that the company had made a widely-expected pre-tax loss of £237m for the six months to 29 June. It confirmed its decision to abandon an interim dividend.

Corus has been hit by weak economic conditions across its key markets as well as over-production. But it said today that the threat of the US imposing tariffs of up to 30% on imported steel had prompted many European mills to cut supplies, helping offset the impact of the heavy price falls suffered in the first quarter.

Corus also provided no indication that Brazil's economic troubles would derail its planned merger with fellow steel maker Companhia Siderurgica Nacional (CSN). Corus shares fell 4 1/4p to 50 3/4p.