Indonesia-based steelmaker PT Krakatau Steel (Persero) Tbk (PT KS) has announced its financial results for the first quarter of the current year, reporting a net profit of $74.1 million for the period compared to a net loss of $62.3 million in the same period of the previous year, achieving its first profit in the last eight years. This improvement is attributed to the 39.8 percent decrease in cost of revenue and the 41.5 percent decline in administrative and general costs.
In the first quarter, the company managed to reduce its operating expenses by 31 percent on year year-on-year basis to $46.8 million. The company also stated that it made cost savings of $130 million in the January-March period of the year.
However, the second quarter performance is expected to be different because the steel market weakened by almost 50 percent due to Indonesia’s current economic conditions caused by the coronavirus outbreak and the company expects this situation to affect its future performance this year, according to Silmy Karim, director of Krakatau Steel.
On the other hand, Mr. Karim said he hoped that economic conditions would improve in the third and fourth quarters and so the company would be able to achieve a profit again.