CSC Steel Holdings Bhd, a key player in Malaysia’s steel industry, recently disclosed a 21% drop in its third-quarter net profit for 2024. The company reported a net profit of RM6.87 million for the three months ending September 30, 2024, down from RM8.35 million in the same period a year earlier. Despite this decline, CSC Steel remains optimistic about the future of the steel market, projecting a potential rebound in both demand and prices, particularly in the final quarter of the year.
The lower profit was largely attributed to various challenges, including competitive pressure from "unfair trade practices" and an overcapacity issue in the industry. These factors, compounded by the expiration of anti-dumping duties on steel imports, have created an environment where CSC Steel faces increased competition from lower-priced foreign products. Despite these difficulties, the company was able to achieve a slight revenue increase of 0.2%, bringing its quarterly revenue to RM404.89 million. However, CSC Steel chose not to declare any dividend for this period, likely in response to the financial strain caused by the challenging market conditions.
Looking ahead, CSC Steel is cautiously optimistic about a potential recovery in the steel market. The company pointed to several factors that could support the sector in the upcoming months, including interest rate cuts in both the United States and China. These cuts are expected to stimulate demand for steel and could lead to higher steel prices globally. The fourth quarter of 2024 is traditionally a peak season for steel consumption, and CSC Steel expects market conditions to improve as demand rises, especially in key sectors like construction.
For the first nine months of 2024, CSC Steel reported a significant decline in net profit, with a 41% drop to RM22.81 million compared to RM38.77 million in the same period in 2023. The company’s revenue for the first nine months was RM1.17 billion, a slight dip of 0.8% from RM1.18 billion in the previous year. The weak financial performance was primarily attributed to a drop in steel prices, which have been negatively affected by increased competition from imports following the expiry of anti-dumping duties. These factors have squeezed profit margins for CSC Steel, making it harder for the company to maintain profitability amidst a challenging market environment.
