Turkish integrated steelmaker
Erdemir has announced a net profit of TRY 432 million ($195 million) for the first quarter of the current year. The company's net profit increased by 52 percent on US dollar basis, while it increased by 89 percent on Turkish lira basis, due to the increased strength of the dollar against the lira, both year on year.
Erdemir's sales revenues decreased by 2.9 percent year on year to $1.3 billion because of declining global steel prices. In the first quarter, the sales volume of flat rolled steel products increased by seven percent to 1.67 million mt, while that of long steel products decreased by 22.8 percent to 352,00 mt, both compared to the same quarter of 2013.
Erdemir announced an EBITDA of $625 million, with
Erdemir chairman Ali Pandır stating that the EBITDA constitutes a significant contribution to
Turkey's struggle to reduce its current account deficit.
Ranking 35th in the world and fourth in
Europe according to worldsteel's
crude steel production reports,
Erdemir's capacity usage rate stood at 93.8 percent in the first quarter, higher than the global average capacity usage rate of 77.8 percent. In the given quarter,
Erdemir's
crude steel output amounted to 2.13 million mt, falling 3.65 percent compared to the corresponding quarter of the previous year.
Mr. Pandır said that in the first quarter the pipe and steel section industry had the biggest share in the company's domestic sales with 38 percent, adding that many industries, particularly the automotive industry, demand wider size products and
Erdemir aims to meet a part of this demand with its planned investments. "Our investment to double galvanized steel capacity will enable us to produce many sizes that were not possible before," Pandır stated.
In response to a question on whether
Erdemir is planning investments abroad, Mr. Pandır said that acquisition rather than establishing new plants is a more plausible option given the overcapacity in the market, though the company is not considering such foreign investments for the time being.
Regarding investments in the next five years, the
Erdemir chairman said investments worth $300 million each year will be handled in four categories: blast furnace maintenance, environmental investments to meet European standards, energy recovery projects, and value added steel products. He indicated that
Erdemir, already generating its own energy, might be able to sell its energy as a result of planned energy investments.
Pandır concluded by saying that investment has not yet started in the mining field located in Divrigi, Malatya, for which the company acquired a state subsidy of TRY 1.5 billion last year, since preparation works are still continuing.