Malaysian steelmaker CSC Steel is likely to focus on sales of pre-painted steel coil (PPGI) and galvanised steel coil (GI) products to increase its earnings in 2020, according to CSC’s financial report.
The mill will target competitive prices for flat steel products to capture domestic market share. The Malaysian economy is facing a major slowdown and the steelmaker may have to deal with weakened demand with no heavy capital expenditures in the pipeline.
On Jan 3, 2020, CSC expressed an intention to dispose of its 6pc holding in CSGT Metals Vietnam for MYR4.96mn.
To mitigate the impact of Covid-19 outbreak and the resulting oversupply of steel relative to the global demand, CSC targets to increase its sales of products with higher profit margins.
Amid the global outbreak, the company expects its revenue to lower due to declining steel prices in the short term. Operations at most construction sites and factories have slowed down impacting steel prices in Malaysia.
In Q4 of 2019 (Oct-Dec), the company posted a total comprehensive income of MYR6.99mn from MYR2.86mn loss in the prior-year quarter.
The company’s net profit was at MYR35mn in Q4 2020 from MYR22.1mn in the prior-year quarter. Sales of cold-rolled coils (CRC) rose, due to lowered steel prices and helped offset the shortfall in PPGI and GI sales. CSC’s performance was also led by favourable operational costs.
In the December quarter, CSC Steel also dealt with weakened domestic demand and with cheaper imports.