Dear Clients,

Amreli Steels Limited (ASTL) held its analyst briefing today to discuss 2QFY21 results and company outlook going forward.

-Amreli Steels Ltd (ASTL) announced its 2QFY21 profits of PkR312mn (EPS of PkR1.05/sh) compared to a net loss of PkR232mn (LPS of PkR0.78/sh) reported in 2QFY20.

– The company sold 99.3k tons up by 21% Y/Y and 19% Y/Y. This drove revenues to record a growth of 26%Y/Y and 21%Q/Q. Revenues stood at PkR9.5bn for the quarter.

– Management highlighted the revenue mix of Retail/Gov’t/Corporate sector is 63/12/25%, respectively.

– Overall profitability for 1HFY21 has largely been a function of (i) rise in volumes by 25% Y/Y (ii) retention rates rising by 2% Y/Y, (iii) lower custom valuation of scrap to USD301/ton from USD360/ton and (iv) a 31% Y/Y decline in finance cost.

– Rebars production was lower amid closure of Dhabeji re-rolling mill for 25 days on account of maintenance.

– Management guided on rebar sales target of ~90/110K tons for 3QFY21/4QFY21.

– ASTL recorded a tax reversal of PkR10mn in 2QFY21 against tax reversal of PkR181mn in the 2QFY20 and a tax reversal of PkR60mn in 1QFY21.

Regards,
KASB Research