International Steels’ profit dips 42% to Rs611.3m
Decline comes on back of significant discounts on its cold-rolled products
A worker stacks steel pipes in a factory. PHOTO: REUTERS
KARACHI:
International Steels Limited’s profit dived 41.9% to Rs611.3 million in the three months ended March 31, 2019 on the back of significant discounts on its cold-rolled products amid a lower pricing power.
The company had reported earnings of Rs1.05 billion in the same period of previous year. Earnings per share declined to Rs1.41 in Jan-Mar 2019 from Rs2.42 in the same quarter of previous year, according to a notice sent to the Pakistan Stock Exchange (PSX).
The company was offering hefty discounts at 5% of the per-ton value of cold-rolled products to push importers out of the market, a Topline Securities’ report stated. “Gross margins during 3QFY19 came in at 9.9% (a 13-quarter low), slightly lower than expectations of 10.6%. Lower margins could be attributed to the reason mentioned above and greater focus of the company on exports (a relatively lower margin market),” the report added.
International Steels’ share price dropped 4.1%, or Rs4.99, and closed at Rs117.12 with trading in 186,500 shares at the PSX.
Meanwhile, net sales improved 24.7% to Rs15.7 billion in the third quarter of the ongoing fiscal year as the company sold around 150-155k tons of flat steel products.
The company did not announce any dividend or bonus for the period.
Finance cost rose a massive 232% during the period to Rs418 million from Rs125.6 million in the previous year. The jump came largely due to increase in interest rate and borrowings of the company. In its report, Topline Securities stated, “We flag downward revision in duty structure, volatility in commodity prices, dumping from countries not protected by anti-dumping duties and devaluation beyond our assumptions, as key risks.”
In the nine-month period, International Steels reported earnings of Rs2.36 billion, which was 27% lower from Rs3.23 billion in the corresponding period of previous year.
Published in The Express Tribune, April 17th, 2019.
International Steels Limited’s profit dived 41.9% to Rs611.3 million in the three months ended March 31, 2019 on the back of significant discounts on its cold-rolled products amid a lower pricing power.
The company had reported earnings of Rs1.05 billion in the same period of previous year. Earnings per share declined to Rs1.41 in Jan-Mar 2019 from Rs2.42 in the same quarter of previous year, according to a notice sent to the Pakistan Stock Exchange (PSX).
The company was offering hefty discounts at 5% of the per-ton value of cold-rolled products to push importers out of the market, a Topline Securities’ report stated. “Gross margins during 3QFY19 came in at 9.9% (a 13-quarter low), slightly lower than expectations of 10.6%. Lower margins could be attributed to the reason mentioned above and greater focus of the company on exports (a relatively lower margin market),” the report added.
International Steels’ share price dropped 4.1%, or Rs4.99, and closed at Rs117.12 with trading in 186,500 shares at the PSX.
Meanwhile, net sales improved 24.7% to Rs15.7 billion in the third quarter of the ongoing fiscal year as the company sold around 150-155k tons of flat steel products.
The company did not announce any dividend or bonus for the period.
Finance cost rose a massive 232% during the period to Rs418 million from Rs125.6 million in the previous year. The jump came largely due to increase in interest rate and borrowings of the company. In its report, Topline Securities stated, “We flag downward revision in duty structure, volatility in commodity prices, dumping from countries not protected by anti-dumping duties and devaluation beyond our assumptions, as key risks.”
In the nine-month period, International Steels reported earnings of Rs2.36 billion, which was 27% lower from Rs3.23 billion in the corresponding period of previous year.
Published in The Express Tribune, April 17th, 2019.