Bangkok--14 Nov--Sahaviriya Steel Industries
- Sale and service revenues Baht 16,796 million, up 34% QoQ
- Consolidated sales volume returned to 928 k tons level, the second highest record
- HRC sales volume is going up 46% QoQ. — 46% of Slab sales volume sold to external parties
- Net loss of Baht 260 million for SSI and consolidated net loss of Baht 2,902 million in Q3/2013, 40% decrease YoY due to improving operating results for both HRC Business and Iron and Steel Making Business
- Net profit of Baht 135 million for SSI and consolidated net loss of Baht 4,145 million for 9 months of 2013, 67% decrease YoY
- SSI completed funds raising program of Baht 10,972.3 million and injected $ 422.6 million into SSI UK to support the production ramp up and achieve a lower cost base when the business will turnaround to profitability.
- Steel prices have since recovered — SSI focuses on increasing sales of Premium Value Products into the high-end sector in Q4/2013 and 2014.
Sahaviriya Steel Industries Plc. (SSI) reports its third quarter and nine months of 2013 as follows:
Q3/2013
Standalone Financial Statement — The Company recorded sale and service revenues Baht 12,272 million, up 41% QoQ but down 12% YoY, with HRC sales volume of 595 k tons, up 46% QoQ. Net loss Baht was 260 million; smaller loss 45% QoQ due to higher sales volume and the reversal of provision for loss on decline in value of inventories.
Consolidated Financial Statements — In Q3/2013, the Company and its subsidiaries recorded sale and service revenues Baht 16,796 million, up 34% QoQ, mainly from increasing sales volume in HRC Business 928 thousand tons, and up 6% YoY due to higher external parties sales volume of Iron and Steel Making Business, which was 46%, with negative EBITDA Baht 1,337 million, and net loss Baht 2,902 million.
Compared to Q2/2013, operating performance was poorer with bigger loss, mainly dragged by operating results of Iron and Steel Making Business which suffered by worsening Slab Margin, even HRC Business loss was lower. On the other hand, compared to Q3/2012, loss was much lower due to improving operating results for both HRC Business and Iron and Steel Making Business although consolidated net loss continued as a result of below-break-even production level of Iron and Steel Making Business.
9 Months/2013 Result
Standalone Financial Statement — The Company recorded sale and service revenues Baht 36,604 million, up 6% YoY, with HRC sales volume of 1,709 k tons, up 11% YoY, as a result of strong domestic demand and secured source of own raw material supply. Net profit was Baht 135 million; up from net loss Baht 1,232 million in the same period last year.
Consolidated Financial Statements — The Company and its subsidiaries recorded sale and service revenues Baht 49,287 million, up 15% YoY from steel sales volume of 2,448 thousand tons. There was negative EBITDA Baht 1,424 million and net loss of Baht 4,145 million.
- HRC Business recorded sale and service revenues Baht 12,272 million, up 41% QoQ, with HRC sales volume of 595 k tons, up 46% QoQ. Premium Value Products contributed 29% of total HRC sales volume with net loss of Baht 260 million.
- Iron and Steel Making Business recorded total sale and service revenues Baht 11,174 million from Slab sales volume of 728 k tons. Slab sold to external parties 333 k tons, or 46% of Slab sales volume. Net loss was Baht 2,821 million
- Deep Sea Port Business recorded total service revenues Baht 95 million, down 7% QoQ from lower throughput volume in every type of vessel except barge. Net profit was Baht 37 million,
- Engineering and Maintenance Service Business recorded total sale and service revenues Baht 216 million, down 10% QoQ. External customers apart from the Company and its subsidiaries took 48% of total sale and service revenues. Net profit was Baht 8 million.
- Cold Rolled Coil Business recorded total sale Baht 2,906 million, up 2% QoQ and net profit of Baht 10 million.
Mr. Win Viriyaprapaikit, Group CEO and President of Sahaviriya Steel Industries Plc. (SSI), said that "In Q3/2013, we performed well operationally: consolidated sales volume returned to 928 k tons level, which is our second highest record; HRC sales volume recovered to normal level; Slab 3rd parties sale was as high as 46%; and PCI technology was successfully commissioned on 9 July 2013. However, Q3/2013 result suffered from margin squeeze as the steel industry went through market down cycle in the middle of the year, contributing to this net loss. Another negative factor was, though PCI start-up was successful and we already started to realise its benefit, we lost some production days due to its start-up commissioning, causing below optimal Blast Furnace operation during the period.”
“Steel prices have since recovered and are currently trending higher in many parts of the world. Going forward, we should expect to see healthier margin for both HRC and Slabs in Q4/2013. PCI injection rate and Blast Furnace output will continue to ramp up to a higher rate, giving us the benefit of higher productivity and lower cost. We also continue to see our product quality being accepted by an increasing number of high-end customers, and with Japan steel supply tightening due to strong economic recovery there, we expect to see increasing sales of our Premium Value Products into the domestic high-end sector substituting import in Q4/2013 and well into 2014."
“Lastly, thanks to the strong support from our shareholders and strategic business partners who had shown confidence in our business and our vision, in early October 2013 we have completed our fund raising program: Baht 9,404.1 million from new capital and Baht 1,568.2 million from asset sales, totaling Baht 10,972.3 million raised. We have consequently injected $422.6 million of additional capital into SSI UK, our Iron and Steelmaking Business unit in the UK, raising total paid-up equity to $895.6 million. This provides the necessary capital for the business as it continues to ramp up output and achieve a lower cost base when the business will turnaround to profitability.”
For more information, please visit http://www.ssi-steel.com/en/investor-relations/ir-home.php