KARACHI: Amreli Steels Limited posted a net profit of Rs337 million in the quarter ended March 2017, down 9% from Rs372 million in the same period of previous year, according to a company notice sent to the Pakistan Stock Exchange (PSX) on Thursday.
Earnings per share (EPS) decreased to Rs1.14 in Jan-Mar 2017 compared to Rs1.25 in the corresponding period of previous year. The KSE 100-share Index closed at 48,743, up 1,140 points or 2.39%, on Thursday. Amreli Steels’ share price closed at Rs100.69, up 4.9% from Rs96.01.
Cumulatively, during the first nine months of fiscal year 2016-17, earnings stood at Rs819 million (EPS Rs2.76) compared to Rs922 million (EPS Rs3.61) in the corresponding period of last year.
During the nine months, sales revenue increased 17% year-on-year to Rs10.14 billion, against Rs8.64 billion last year, driven by improved volumes, despite falling sale prices, according to a report of Taurus Securities.
With depressed selling prices and increased scrap costs, gross margins dropped 5.71 percentage points to 17.15% in the first nine months of FY17.
Moreover, finance cost fell 32% year-on-year as the company continued to de-leverage its balance sheet.
On a quarterly basis, Amreli Steels’ gross margins jumped 2.29 percentage points from 17.23% in the second quarter of FY17 to 19.53% in the third quarter as increase in scrap costs was more than offset by higher average selling prices (up 5% quarter-on-quarter).
The board of directors made a major announcement by approving the second phase of expansion, which along with the first phase, should push the company’s maximum annual rolling and melting capacities by 570,000 tons and 400,000 tons to 750,000 tons and 600,000 tons, respectively.
The expansion is subject to approval of technical feasibility and is expected to be completed by fiscal year 2018-19.
Published in The Express Tribune, April 21st, 2017.
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