Thailand’s SSI cuts Q3 Ebitda loss to $42m

Sahaviriya Steel Industries (SSI), Thailand’s biggest steelmaker, has reduced its third-quarter core earnings loss by 57% year-on-year, it said late on Thursday November 14.

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It achieved the result on higher sales volumes and reversal of a loss provision on a decline in value of inventories, it said.

Earnings before interest, taxes, depreciation and amortisation (Ebitda) on a consolidated basis for July-September 2013 came in at a loss of 1.34 billion baht ($42.4 million).

This was down from an Ebitda loss of 3.13 billion baht ($98.9 million) a year earlier, but 51% up quarter-on-quarter from a loss of 887 million baht ($28 million).

“Compared with [the second quarter of] 2013, operating performance was poorer, with a bigger loss, mainly dragged down by operating results from the iron and steel making business,” the company said.

Margins on slab were smaller and even the company’s hot rolled coil business was affected, it added.

Group sales revenue for the third quarter rose by 6% year-on-year to 16.8 billion baht ($531 million), while group sales volumes surged by 24% year-on-year to 928,000 tonnes.

While the company performed well operationally in the third quarter, it suffered from margin squeezing as the steel industry went through a down-cycle in the middle of the year, contributing to the loss, group ceo and president Win Viriyaprapaikit said.

Another negative factor was that, although pulverized coal injection (PCI) start-up at its UK plant was successful and the company has begun to realise its benefit, it lost some production days in the start-up commissioning, resulting in below-optimal blast furnace operation, he said.

“Steel prices have since recovered and are currently trending higher in many parts of the world. We expect to see healthier margins for both hot rolled coil and slabs in [the fourth quarter of] 2013,” Viriyaprapaikit said.

Following completion of a fund-raising programme early last month, SSI has injected $422.6 million of additional capital into SSI UK, its iron and steelmaking business unit in the UK, raising total paid-up equity to $895.6 million, he said.