Bangkok--14 Nov--Sahaviriya Steel Industries
- Net loss of THB 4,782 million, comparing to net loss of THB 5,022 million in Q2/2012
- Record group revenue was THB 15,794 million, rose up 38% q-o-q
- HRC shipment volume was 617 thousand tons
- HRC daily production highest record 12,449 tons on 20 September 2012.
- Premium Value Products sales ratio was 36%
- On target to achieve THB 58,000 million highest revenue
- Comprehensive Financial Plan and Capital Increase is under way
- Expects similar level of HRC sales and higher production at SSI Teesside in Q4
Mr. Win Viriyaprapaikit, Group CEO and President of Sahaviriya Steel Industries Public Company Limited (SSI), revealed about the Q3/2012 operating result that there was a net loss of THB 4,782 million, comparing to a net loss of THB 5,022 million in Q2/2012 and a net loss of THB 2,965 million in Q3/2011. Group revenue was THB 15,794 million, up 38% q-o-q, the highest revenue in record. HRC Business’s shipment volume also achieved the second highest record of 617 thousand tons, whilst Premium Value Products’ total sales ratio was 36%. Iron and Steel Making Business ‘s capacity utilization was 69% and produced 620 thousand tons of steel slabs which generated THB 2,584 million revenue from sales to third party customers.
“We have been through an extremely difficult market environment in the third quarter. Steel and raw material prices dropped sharply due to ongoing Eurozone issues and China growth slow-down, causing negative margin and stock loss in our main business. Our Iron and Steel Making Business was still in the ramp-up phase and had relatively high production cost. These were the two main factors for our loss in the past quarter.
Remarkably, HRC Business had a stellar quarter in terms of production and sales, in spite of ongoing market dumping of boron-added flat steel products from other countries. Q3 HRC domestic demand was very strong at record 1.65 million tons. We gained market share and our production cost was low due to high productivity, partly thanks to continuous slabs supply from our SSI Teesside plant. Therefore, despite the extremely challenging market environment, we are achieving our operating targets and the synergy from the upstream integration is beginning to be realized. We are on target to achieve highest group revenue of THB 58,000 million this year,” Mr. Win said.
Mr. Win updated on the announced the Comprehensive Financial Plan which will enable SSI and its subsidiaries to maintain short-term and long-term financial stability. The plan includes the recapitalization of the business - capital increase from issuance of up to 19,000 million new shares at 0.68 baht per share, to be allotted via Private Placements and Rights Offerings. On 6 November, two long-term business partners, JFE Steel Corporation and Marubeni-Itochu Steel Inc., had subscribed for 2,267,816,176 shares resulting in THB 1,542 million of new equity raised.
“The other allotments are currently under execution and we will update again when it is done. Thanks to our business partners and shareholders who believe in our business, our vision and our people, we will regain our financial strength and this will reduce SSI’s financial cost and provide sufficient working capital for future sales growth,” Mr. Win added.
The company forecasts 9.2% growth in Thailand HRC consumption this year to a record 6.4 million tons and overall steel demand to reach a record 16 million tons, driven by resilient domestic economy, government investment spending and growth in key industries such as automobile, energy and construction. Steel and raw material prices had passed the trough in Q3 and began to recover in Q4, with iron ore index climbing up from about US$88/mt at the bottom of the cycle to about US$124/MT CFR China in the recent days. In Q4/2012, the company expected similarly high level of HRC sales and higher capacity utilization of 80% at SSI Teesside plant leading to lower cost and better margin.