Erciyas Çelik Boru, a prominent Turkish pipe manufacturer, has unveiled its financial performance for the first half of the year, reflecting both opportunities and challenges within the sector. For the period spanning January to June, the company reported a net profit of TRY 30.65 million ($903,358). This marks a decrease from the TRY 38.27 million profit achieved during the same period in 2023, indicating a notable shift in the company's financial landscape.
The decline in net profit aligns with a broader reduction in sales revenues. Erciyas Çelik Boru experienced a 14.7% year-on-year drop in revenues, totaling TRY 3.62 billion ($106.69 million). This decrease is attributed to various factors, including market conditions and fluctuations in demand. Despite the decrease in revenues, the company reported an operating profit of TRY 610.84 million ($18 million), which, although lower than the TRY 629.75 million reported in the first half of 2023, still demonstrates a robust operational performance.
A significant aspect of Erciyas Çelik Boru’s sales strategy is its export focus. During the first half of the year, 59.0% of the company’s total pipe sales tonnage comprised export sales. The company’s strategy includes shipping pipes with large specifications and weights to international markets. However, this focus on exports has implications for the company's costs. Shipment and export expenses accounted for a substantial 80.0% of its total marketing, sales, and distribution costs during the period.
The breakdown of sales by product type reveals a substantial share for gas and piling pipes, which constituted 63.0% of the total sales volume. Water pipe sales made up the remaining 37.0% of the company’s sales. This distribution highlights the company's strategic emphasis on high-value products with significant market demand.
Erciyas Çelik Boru also provided insight into broader economic conditions affecting its performance. The company noted a general slowdown in economic indicators for the year, which has impacted market dynamics. Additionally, recent reductions in incentives by the Chinese government have dampened expectations of a market recovery. The lack of substantial support from China, a key player in the global steel and pipe industry, has further compounded the challenges faced by the company.
