PHOTO: REUTERS
The result has come in line with market expectations. Earnings per share (EPS) jumped to Rs7 in FY17 from an EPS of Rs2.71 in the preceding year.
Along with the result, the steel company declared a final cash dividend of Rs1 per share, which was in addition to the Rs2.5 per share paid earlier as interim dividend.
Expansion:International Steels plans to boost production capacity
As the benchmark KSE 100-share Index slumped 1,389 points on Tuesday, International Steels’ stock price also took a hit, falling 4.2% at Rs125.11.
In the fourth quarter (April-June), sales came in at Rs8.9 billion, depicting a strong growth of 58% year-on-year (YoY).
However, gross margins contracted 13 percentage points YoY to 15% likely due to extreme volatility in international steel prices.
The price of hot-rolled coils averaged $473 per ton in the fourth quarter (up 13% YoY) and traded in a wide range of $431-$522.
Consequently, gross profits shrank 16% YoY to Rs1.3 billion during the quarter, leading to a 19% contraction in pre-tax profit.
During FY17, the company reported sales of Rs33.7 billion, registering a growth of 65% while gross margins grew three percentage points to 17.5%.
International Steel: Trading starts at the Karachi stock exchange
Gross profits doubled to Rs5.9 billion while a 38% reduction in financial charges to Rs425 million led to a 179% increase in profit before tax.
Higher effective taxation of 34% compared to 29% last year squeezed the bottom line growth to 158%.
A downward revision in the duty structure, volatility in commodity prices, dumping from countries not covered by anti-dumping duties and delay in commissioning of expansion are key risks for the company.
Published in The Express Tribune, August 16th, 2017.
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