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Essar Steel incurs Rs 357 million loss in Q1

Essar Steel has incurred a loss of Rs 357 million in the first quarter of the fiscal year ended June 30, 1998.

The unaudited Q1 financial results recorded a total turnover of Rs 5.06 billion and the gross profit before interest, depreciation and taxation was Rs 1.44 billion for the first quarter.

However, after considering the higher finance and depreciation cost, the company incurred a net loss of Rs 357 million. Interest-net was higher at Rs 964.9 million and depreciation was Rs 746.2 million. The paid up equity share capital was Rs 3.30 billion.

The international markets are suffering from the south east Asian meltdown and forecasts expect consumption of steel to slow down in 1998. The revision of forecasts has been prompted by slowdown in economic growth in most Asian countries and a possible softening of economic growth in Europe and the US in the second half of 1998.

These have had a dampening impact on all the steel producers, more prominently in the last few months, a company release said.

Due to weaker demand in most Asian markets, export efforts by producers across all regions have intensified due to inflow of low-priced Korean, Japanese and Taiwanese material. As a result of the large-scale imports from other parts of Asia, the hot-rolled coil prices have declined in most of the countries over the last two quarters, the release added.

In domestic market also, the economy has not shown any tangible signs of revival as yet with continuing decline in industrial production, exports and slack demand which had its impact in the domestic steel industry considerably, the release added.

UNI