The company said a recovery in steel prices and volumes had helped it trim losses to �36m, against �252m a year earlier.

New chief executive Philippe Varin also promised major investment in Corus's UK business following a year of turmoil.

He said �90m would be put into the company's engineering steels business, which has its main base at Rotherham, South Yorkshire.

The unit makes specialised products for sectors including the aerospace industry.

Looking ahead, Corus said the immediate outlook for trading remained difficult because of continued weak demand from the manufacturing and construction sectors.

'Unsatisfactory results'

And despite the narrowing losses chief executive Phillippe Varin said plenty still remained to be done.

"Corus has some strong businesses but is currently producing unsatisfactory results," he said.

"Although we have developed considerable momentum, implementing all our plans will take some time."

Looking ahead, the firm forecast a difficult operating environment in the immediate term due to continued weak demand in Europe.

Mr Varin failed to give any details of restructuring of its UK steel operations which it announced in April, or announce a rights issue which market watchers had been eagerly awaiting.

Corus merely said the plans would be paid for by a combination of disposals and new financing.

The restructuring of the UK business will come at a price for Corus workers as the company has already announced its intention to cut at least 1,150 jobs between now and the end of 2004. But a further 2,200 could go.

Breathing space

Under the plans, the firm's steelmaking plant and rolling mill in Stockbridge, South Yorkshire, will close, although the same site will still be involved in product finishing and processing, Corus said.

Including the �90m investment in engineering steels, the cost of the UK restructuring and redundancies is likely to be around �250m.

Proceeds from disposals, including two businesses in the US, will pay for the first phase of the shake-up, which is expected to cost around �90m.

Corus gained vital breathing space last month when it signed a new three-year debt facility for 1.2 billion euros (�837m). which will run until the end of June 2006.

It was rare positive news for the company which was forced earlier this year to call off a key sale of some of its aluminium assets amid opposition from its Dutch arm.

The same week also saw the departure of the firm's chief executive Tony Pedder.

In the City, shares in the firm fell 8.3% to 27.5p in early trade.