Posted on 18 Aug 2023
Steel manufacturer CSC Steel Holdings Bhd’s net profit fell 12.71% to RM14.9 million in the second quarter ended June 30, 2023 (2QFY2023) from RM17.07 million a year ago, due to the absence of disposal gain of an investment property and lower revenue incurred during the quarter under review.
As a result, earnings per share declined to 4.03 sen in 2QFY2023 from 4.62 sen a year before, its bourse filing showed on Aug 18 (Friday).
Revenue for the quarter dropped 28.22% to RM372.98 million from RM519.6 million a year before, due to weakened export sales volumes and lower average selling prices.
For the cumulative six months of FY2023 (6MFY2023), its net profit rose 5.22% to RM30.64 million from RM29.12 million a year before while revenue shrank 20.15% to RM778.23 million from RM974.66 million previously.
It said the increase in profitability in 6MFY2023 was due to an increase in income from other investments while the decline in revenue was because of the decrease in steel prices.
Looking forward, the group expects the steel market to continue to be volatile in the third quarter of 2023.
“With the Chinese government's effort to reduce steel production, steel prices may increase slightly. However, continuous inflation, uncontrolled energy prices, interest rate increases and overall global economic conditions will have an adverse effect on the steel price. Thus the steel market will remain unpredictable in the near future,” it explained.
As for domestic demand in Malaysia, the group said it is expected to remain volatile.
A lack of upward momentum coupled with cost inflation and a continued flood of imports due to uplifted trade barriers will put the steel market in uncertainty, it added.
As such, the group said it will continuously monitor the steel market, implement strategies, and mitigate risks to deliver the best steel quality and good customer service.
CSC Steel’s share price settled one sen or 0.85% higher at RM1.16 on Friday, giving the group a market capitalisation of RM441 million.
Source:The Edge
