CSCSTEEL ... Dec09

CSC STEEL HOLDINGS recorded Net Profit of RM38.8m for 3QE Sep 2009 compared with RM27.3m - an improvement of 42% from same quarter last year mainly due to the absence of the inventory write-downs.

In the Company's EXCHANGE filing Nov 13, 2009, the Company said that Revenue was RM261.4m, down 31.4% from RM381.1m a year ago. EPS was 10.42 sen compared with 7.29 sen.

" .... The significant drop in revenue is due to lower selling prices of our steel products although sale volume improved marginally ...." it said. " .... Despite the lower revenue, PBT increased by RM25.1m or 88.2% to RM53.6m. This is mainly due to the absence of the write-down of inventories to Net Realisable value amounted to RM30m made in the corresponding quarter (a year ago) ,,,," it added.

QoQ IMPROVEMENT
When compared with 2QE Jun 2009, the Group's Revenue rose 61.9% from RM161.6m to RM261.5m in 3QE Sep 2009. PBT increased by RM41.1M or 328% from RM12.5M in 2QE Jun 2009.

CSC STEEL said the better performances in Revenue and PBT were driven by both higher sales volume and favourable selling prices of its steel products. " .... The improved sale volume was supported by the timely increase in supply of hot rolled steel (HRC) from our ultimate parent company, CHINA STEEL CORPORATION, to make up for the delay in local HRC supply ...." it added.

9ME SEP 2009 NET PROFIT DROPS 46%
For 9ME Sep 2009, Net Profit was RM54.0m compared with RM100.8m the previous corresponding period. Revenue also fell to RM596.1m compared with RM1.16 bil a year ago.

PROSPECTS
On the current year prospects, it said the local steel market has slowed down since Oct 2009 after a series of price increases since second quarter 2009.

CSC STEEL said overcapacity and high inventory which caused steel prices falling in China since August 2009 was the main factor that made local buyers cautious in re-stocking activities.

Steel prices in China have, however, started rising since mid-Oct 2009. CSC said the Group expects steel market to recover by end of 2009 or beginning 2010 as the stimulus packages introduced by many countries, especially China, with forecast GDP growth of above 8.0% 2009 kicks in.

In Malaysia, domestic steel demand was increasing as projects under the stimulus packages, are being gradually implemented. " .... Coupled with the current low inventory level, we expect greater re-ordering activities to take place once international steel market starts to recover ...." said the Company.