TATA STEEL (Thailand) Plc yesterday revealed the company’s operating results for the third quarter of fiscal year 2019 (October-December 2018), showing the sales volume in the current quarter was almost at par with the previous quarter.
When compared to the same quarter last year, it was lower due to depressed market sentiments in the country and the reasons stated above.
However, the lower sales volume in the domestic market was partially offset by the higher exports of Rebar to Cambodia, India and Laos and of wire rod to Indonesia.
The sales volume in the nine months of the fiscal year 2019 was lower than the previous year by 6 per cent, due to weak sentiment in the project construction market in the country. At the same time, the company sold a higher volume in the retail channel and maintained the domestic sales volume for wire rods.
Net sales during the current quarter was down by six per cent over the previous quarter, due to weak sentiment in the domestic market resulting in a lower selling price. On a nine-month basis as compared to the previous year, the net sales were higher by four per cent primarily due to the higher prices of finished goods during the April-October period being partly offset by the lower domestic sales volumes.
Rajiv Mangal, president and CEO of Tata Steel (Thailand), said that long products in the construction steel market remains subdued in the country with low demand. There has been a significant drop in international prices of finished steel and billets since November 2018. Consequently, customers have been reluctant to book orders in anticipation of a further price drop. Coupled with seasonal holidays in December, this has resulted in fewer enquiries and hence orders from end customers and the dealers.
Mangal said that for the profit before tax, the company reported a current quarter loss of Bt196 million against the backdrop of depressed market sentiments from lower demand and a steep decline in international steel prices as explained above.
The impact of this was significant in the quarter as the company imports a sizeable volume of raw material with a long lead time. There was an accident at the Electric Arc Furnace at SCSC, a subsidiary of the company, on October 6, 2018. Disruption of operations and related repair expenses also impacted the bottom line adversely. For the nine months of fiscal year 2019, the loss stands at Bt55 million.
As of December 31, 2018, the total assets have decreased by Bt192 million over March 31, 2018 mainly due to the reduction in trade and other receivables by Bt571 million, the reduction in properties, plant and equipment by Bt110 million on account of normal depreciation, and partly compensated by an increase in raw material inventory by Bt380 million.
Meanwhile, as on December 31, 2018, the total liabilities and shareholder equity had decreased by Bt192 million over March 31, 2018 mainly due to the reduction in trade and other payables by Bt368 million, the increase in short-term working capital borrowings by Bt242 million, and the reduction in shareholders’ equity by Bt75 million from the current net loss of nine months for fiscal year 2019.