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Dumping inflates Essar Steel's loss to Rs 1.19 billion

Essar Steel Limited incurred a net loss of Rs 1.19 billion for the quarter ended December 31,1998, taking the total loss for nine months of the fiscal year to Rs 2.26 billion.

The losses were consonant with the industry's. It is suffering sluggish domestic demand and imports of steel at dumping prices coupled with sharp drop in the prices.

The total income for the quarter was Rs 6.18 billion and for the nine month, Rs 17.49 billion. While the gross profit for the quarter was Rs 833 million, provision for interest and finance charges was higher at Rs 1.18 billion and depreciation/amortisation and deferred revenue expenses at Rs 845.2 million.

The third quarter witnessed increased lobbying by the developed countries to establish a case of dumping and provide adequate protection to the steel industry. The financial year 1999 has been a tough year with demand stagnation.

On the other hand, supply pressures have increased with additional capacities coming into play. The import of steel at dumping prices has further deepened the crisis as domestic players had also to drop prices sharply in order to maintain volumes.

However, the positive impact of the anti-dumping and floor price measures announced by the government will be felt in the fourth quarter. With expected improved volumes and arrest of the downtrend in international prices, margins and profitability will be improved in the fourth quarter, the company said in a statement.

UNI

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