CSC Steel Holdings Bhd has posted net profit of MYR 38.89 million in the third quarter ended September 30th 2009, up by 42% YoY, mainly due to the absence of the write down in inventories. Revenue was MYR 261.48 million, down by 31.4% YoY from MYR 381.17 million a year ago.
CSC Steel Holdings said that "The significant drop in revenue is due to lower selling prices of our steel products although sale volume improved marginally. Despite the lower revenue, profit before tax increased by MYR 25.1 million or 88.2% to MYR 53.6 million. This is mainly due to the absence of the write down of inventories to net realisable value amounted to MYR 30 million made in the corresponding quarter."
It added that "The improved sale volume was supported by the timely increase in supply of hot rolled steel from our ultimate parent company, China Steel Corporation, to make up for the delay in local HRC supply."
For the January to September 2009 period, net profit was MYR 54.03 million as compared with MYR 100.85 million the previous corresponding period. Revenue also fell, down to MYR 596.19 million as compared with MYR 1.167 billion a year ago.
CSC Steel said that overcapacity and high inventory which caused steel prices falling in China since August 2009 was the main factor that made local buyers cautious in re stocking activities. However, from mid October 2009, steel prices in China had begun to increase.
(Sourced from www.theedgemalaysia.com)
