CAIRO: Egypt’s steel biggest steel maker Ezz Steel reported a net loss of 136 million EGP ($17 million) in the first quarter of 2015, compared to 235 million EGP in the previous quarter, it announced Thursday.
“This comes above the Bloomberg consensus forecast of a net loss of 105 million EGP, and significantly above our forecast of a net loss of 42 million EGP, mainly on the back of lower margins,” HC Brokerage and Investment commented in an emailed statement Thursday.
HC added that Ezz Steel reported a slight 2 percent y-o-y drop in volumes to 1.14 million tons (3 percent below HC estimate,) a nine percent y-o-y decline in revenue to 4.79 billion EGP (seven percent below HC forecast), and a 44 percent fall in earnings before interest, taxes, depreciation and amortization (EBITDA) to 216 million EGP (31 percent lower than expected.)
“We believe the main reason behind the worse-than-expected EBITDA figure is the lower utilization rate, with the company posting 81,931 tons of finished steel sales versus our forecast of 123,750 tons,” HC explained.
Difficulty sourcing USD, besides utilities supply disruption, contributed heavily to lower utilization, added HC.