Egypt's largest steel producer Al Ezz Steel Rebars S.A.E. (EZZ) has announced its consolidated financial results for the third quarter and first nine months of 2009.
According to the statement released by the company, in the third quarter of 2009 EZZ's net loss amounted to EGP 67.64 million ($12.4 million), compared to a net profit of EGP 503.38 million in the corresponding period of 2008. Meanwhile, the company's consolidated net revenues in the third quarter of 2009 came to EGP 2.7 billion ($495.18 million), decreasing by 58.13 percent year on year.
On the other hand, in January-September period of the current year, EZZ's net profit plummeted by 98.09 percent, reaching EGP 29.2 million ($5.35 million), while the company's net revenues totaled EGP 9.4 billion ($1.72 billion), down 46 percent, both compared to the corresponding period of 2008.
In the first nine months of this year, the producer's long steel sales volume reached 2.41 million metric tons, up four percent year on year, while the flat steel sales volume witnessed a sharp decline from 1.24 million mt in January-September 2008 to 762,000 mt, down 39 percent, due to the shutdown of EZZ's flat steel plant. Long steel products accounted for 77 percent of total sales in the first nine months of 2009, while flat steel products represented 22 percent of sales. Long product exports accounted for one percent of total longs sales, due to the continued strength of domestic market demand for long products. Flat product exports accounted for 50 percent of total flat sales.
The long steel production volume reached 2.53 million mt in the first nine months of 2009, representing a yearly increase of seven percent, while the flat steel production volume was 42 percent lower at 710,000 mt in the given period.
Commenting on the results, EZZ's managing director Paul Chekaiban said, "The trends of the year so far have continued into the third quarter. While prices continued to soften in line with international markets, the domestic demand for steel products continued to be very strong. As a consequence, our production in the facilities that serve the domestic market achieved record levels."
Regarding the outlook for the market, EZZ stated that it remains confident about the continued strength of the Egyptian market, which has remained largely unaffected by the global economic slowdown. Long product demand is expected to continue to be strong, due to the private housing market and local real estate activity. Conditions in the global flat steel market had been very weak since the last quarter of 2008, but the company says that it has started to see some signs of improvement.