Amreli Steels Reports Significant Losses in First Half of FY23

Amreli Steels Limited (PSX: ASTL) reported a loss of Rs. 184 million for the first half of fiscal year 2022-23 (1HFY23), compared to a net profit of Rs. 1.303 billion in 1HFY22.

The company lost Rs. 388 million in the quarter that ended on December 31, 2022, compared to a profit of Rs. 601 million in the previous quarter.

The company’s net sales were Rs. 13.2 billion in 2QFY23, down 11 percent year on year (YoY) due to the economic slowdown, which offset the impact of a retention price increase, projected at Rs. 196,000 per ton versus Rs. 155,000 per ton in the same period last year.

Similarly, sales in 1HFY23 fell 13.5 percent year on year to Rs. 23 billion.

In 1HFY23, the company earned Rs. 2.44 billion in gross profit. Despite low scrap prices, gross profit fell to Rs. 0.85 billion in Q2, with gross margins falling to 6.5 percent from 11.5 percent in 2QFY22.

Other income decreased by 67.6 percent year on year in 1HFY23, falling to Rs. 6.89 million from Rs. 21.32 million in 1HFY22. Meanwhile, other income fell by 9 percent year on year in the second quarter of fiscal year 23 to Rs. 5 million.

Administrative expenses fell slightly during the half year, from Rs. 354 million to Rs. 334 million, while other distribution costs were Rs. 499 million, down 0.76 percent from Rs. 502 million in 1HFY22.

Because of higher interest rates, finance costs increased by 129 percent year on year to Rs. 1.96 billion in 1HFY23.

During 1HFY23, the steelmaker paid Rs. 232 million in taxes, 5.3 percent less than the previous year’s payment of Rs. 245 million.

ASTL reported a loss per share (LPS) of Rs. 0.62 in 1HFY23, compared to an EPS of Rs. 4.39 in 1HFY22.

On Friday, the company’s stock closed at Rs. 17.4, down 4 percent or Rs. 0.74, with 102,450 shares traded.

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