ISL to invest Rs965 million in expansion projects

Also announces Rs1.17b profit in Oct-Dec period

KARACHI: International Steels Limited (ISL) approved to inject Rs965 million into different projects that will be completed within the next 12 months, according to a company notice sent to the Pakistan Stock Exchange.

The company will establish two product service centres in Karachi and Lahore at a cost of approximately Rs675 million for the installation of Slitter & CTL machines. The centres will be established through the purchase of land in Karachi and by renting in Lahore.

Moreover, the Board of Directors of the company also approved a capital expenditure of Rs290 million for the installation of additional annealing. This added capacity of 100,000 tons per annum will provide various advantages and cost efficiencies, stated the company, adding that the project is expected to be completed within the next 10 months.

Quarterly results

The company also reported that it posted a profit of Rs1.17 billion (EPS of Rs2.71) in the quarter ended December 31, 2017, up 97% compared with Rs594 million (EPS of Rs1.37) in the same period last year.

This takes half-year (July to December 2017) profit to Rs2.18 billion (EPS of Rs5.02), up 90% compared with Rs1.15 billion (EPS of Rs2.67) in the same period last year.

Along with the result, ISL declared an interim cash dividend of Rs1.5 per share.

The KSE-100 index closed at 44,907, up 9 points or 0.02%. The company’s share price rose to Rs124.28, up 2.1% from its previous closing price.

ISL surpassed its own sales record, posting highest quarterly sales revenue of Rs11.5 billion owing to an increase in selling prices, while volumes were likely stable, according to a Topline Securities report.

CPEC effect

Since the announcement of the China-Pakistan Economic Corridor (CPEC) in April 2015, Pakistan’s steel industry is looking at expansions.

Steel demand in Pakistan is expected to rise at a faster rate in coming years due to expectations of healthy economic growth in the country. The country achieved 5.3% GDP growth rate - highest in a decade - in fiscal year that ended on June 30, 2017.

According to the World Steel Association (WSA), Pakistan’s total steel use in 2015 was 7.1 million tons, which translates into a per-capita use of just 37.5kg - one of the lowest in the world. Analysts expect the country’s steel requirement to grow to over 12 million tons by 2019, taking per-capita need to 62kg.

Published in The Express Tribune, January 24^th, 2018.

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