SSI achieves new record of sales volume with strong profit of 1.47 billion baht in Q1

SSI earned Bt.1.47 billion baht in Q1/2010 due to the increases of sales volume and price as well as high rolling margin, while WCE and PPC, two affiliates, and TCRSS, JV company, also posted excellent results. Hits quarterly production and shipment new record, on track to 2.7 million tons sales volume and 50 billion baht revenue target.

Mr. Win Viriyaprapaikit, President of Sahaviriya Steel Industries PLC(“SSI”) reveals that in Q1/2010 the Company and its subsidiaries realized total revenues of Bt.13.976 billion and revenue from sales of hot-rolled coil of Bt.13.677 billion, up 105% and 106% year-on-year over Q1/2009, which were Bt.6.820 billion and Bt.6.654 billion respectively. Sales revenue consists of Bt.12.334 billion domestic sales and Bt.1.343 billion export sales, representing 115% and 48% year-on-year increase compared to Bt.5.747 billion and Bt.0.907 billion in the same period last year.

Mr. Win Viriyaprapaikit, President of Sahaviriya Steel Industries PLC(“SSI”) reveals that in Q1/2010 the Company and its subsidiaries realized total revenues of Bt.13.976 billion and revenue from sales of hot-rolled coil of Bt.13.677 billion, up 105% and 106% year-on-year over Q1/2009, which were Bt.6.820 billion and Bt.6.654 billion respectively. Sales revenue consists of Bt.12.334 billion domestic sales and Bt.1.343 billion export sales, representing 115% and 48% year-on-year increase compared to Bt.5.747 billion and Bt.0.907 billion in the same period last year.

“This strong result was attributed to 1. higher sales volume due to expanded domestic market share, a strong recovery of automobile sector (the latest figures of domestic car production reported by The Federation of Thai Industries amounted to 380,000 units in Q1, or 92% up from the same period last year), and improvement of customer service together with sales promotion initiatives such as “product co-development program with customers”, 2. higher selling price per unit by 4% quarter-on-quarter following a price hike of steel products in the world market, 3. reduction of production cost per unit by 9% from 2009 level, and 4. high rolling margin.” Mr. Win said.

Mr. Win also added that “the Company is gaining more trusts from our customers as we successfully increased order quantity and added new customers. In the first quarter, we were able to add three new customers and delivered three new products into the market. We believe that the pursuant of our purpose ‘Innovate Premium Value steel products and services for customer; generate consistent profit and sustainable value for stakeholders’ under the Company’s new business plan, will bring the Company success in sustainable way over the long term.

In Q1, the Company marked a new record of quarterly production and shipment at 689,831 tons and 679,049 tons, which were the highest among Thai steel companies, beating its previous records of quarterly production of 655,565 tons in Q4/2009 and quarterly shipment of 556,068 tons in Q2/2006 respectively. In 2010, the Company targets at 2.7 million tons of production and shipment, and Bt.50 billion of sales revenue.

In addition, the Company’s jointly-controlled entity and subsidiaries posted positive operating results in Q1 and delivered good return to SSI. SSI has enjoyed direct benefits from Thai Cold Rolled Steel Sheet PLC (“TCRSS”), its jointly-controlled entity, through closed marketing cooperation which help boost sales volume and reduce inventory cycle for both SSI and TCRSS; in Q1 SSI realized net profit from investment in TCRSS of Bt. 53.5 million following strong recovery of automobile sector. West Coast Engineering Co., Ltd. (“WCE”) also reported a net profit of Bt.11 million in Q1 and continues to grow with orders backlog with both internal and external customers such as Esso (Thailand) Co., Ltd., The Cement Business of SCG Group, Thai Kraft Paper Industry Co., Ltd., Howden Australia PTY Ltd., Cristalla Engineering Co., Ltd., GFA Anlagengan GmbH, and etc. Prachuap Port Co., Ltd (“PPC”) realized a net profit in Q1 of Bt. 54 million.

Recent recovery of global and domestic steel industry has been supported by strong demand, rising consumer confidence, and growth in down-stream industries particularly the automobile and energy sectors such as gas cylinder, gas pipe, and transformers, which use high-grade steel sheets as raw materials. Steel price is expected to rise further due to supply constrain as a result of production cut of major producers worldwide, and rising cost of raw materials such as iron ore and coal.”