Southern Steel posts 2Q net loss on lower sales volume, selling prices

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KUALA LUMPUR (Feb 18): Southern Steel Bhd slipped into the red in the second quarter ended Dec 31, 2018 (2QFY19), posting a net loss of RM44.41 million compared with a net profit of RM69.96 million a year ago, on lower sales volume and selling prices.

This is its first loss-making quarter since 4QFY16.

This resulted a loss per share of 10.24 sen for 2QFY19 compared with an earnings per share of 16.17 sen for 2QFY18.

Quarterly revenue was also down 15.4% to RM809.51 million, from RM956.44 million in 2QFY18.

The weak quarterly results dragged down Southern Steel's performance for the cumulative six months (1HFY19), where it reported a net loss of RM42.63 million versus a net profit of RM123.38 million a year ago, while revenue slid 6.3% to RM1.74 billion, from RM1.86 billion in 1HFY18.

Moving forward, Southern Steel said the market is expected to remain soft for the remaining year with the festive seasons and ongoing review of infrastructure projects by the government.

"However, the group will continue to explore export markets and adopt measures to mitigate the impact of adverse market condition," it said in a filing with Bursa Malaysia today.

Southern Steel shares closed 1.5 sen or 1.7% higher at 89.5 sen today, bringing a market capitalisation of RM388.11 million. Over the past year, the stock's share price has fallen 61% from RM2.32.