Posted on 31 Aug 2021
CSC Steel Holdings Bhd is back in the black with a net profit of RM15.43 million for the second quarter ended June 30, 2021 (2QFY21), compared with a net loss of RM2.16 million a year earlier.
The higher net profit, said the group, came on the back of improved product margins.
Revenue rose 167% to RM203 million, from RM121.4 million in 2QFY20, lifted by higher sales volume and selling prices. This came as the group saw better market demand for its products amid supply constraints which pushed steel prices up.
In a filing with Bursa Malaysia, CSC Steel added that its ability to operate at full capacity for the first two months of 2QFY21 allowed it to meet its customers’ needs. The group saw less business disruption during the Movement Control Order 3.0, compared to MCO1.0 a year ago. This also contributed to the group’s better performance, it said.
For the first half of FY21, CSC Steel said net profit improved by 13 times to RM37.26 million, from RM2.85 million previously.
The six-month revenue jumped 82.5% to RM740.43 million, from RM405.68 million a year ago.
The group said that the better 1H21 performance was due to higher sales volume, which increased 43% from 149,200 tonnes a year ago due to material supply constraints, an uptrend in steel prices and a smaller impact from the MCO operations halt.
The group said Malaysia’s steel prices have increased steadily, as it has been impacted by the global steel market developments since early 2021.
It said the stricter lockdown implemented in June has affected the nationwide steel supply chain and downstream related industries, as the steel industry falls under non-essential industries and face restricted operations.
“The group predicts that after the resumption of operations in second half of the year, the domestic steel market will still be affected by the imbalance of global supply and demand, as the domestic steel prices are expected to remain at a commanding level,” it added.
CSC Steel’s share price fell 2.11% to RM1.39 today, giving the group a market capitalisation of RM528.2 million.
Source:The Edge
