Lion Corp continues to bleed

by **Cals** Wed 27 Nov 2013, 10:35

Business & Markets 2013

Written by Fatin Rasyiqah Mustaza of theedgemalaysia.com

Wednesday, 27 November 2013 10:19

KUALA LUMPUR: Malaysia’s dominant steel producer, Lion Corp Bhd is still mired in the red with another loss in the latest quarterly results that further reduced its shareholders’ fund to RM48.9 million as at end September.

In its first quarter ended Sept 30 of 2014 financial year (1QFY14), the steel manufacturer saw its net loss widen to RM98.84 million from RM87.55 million a year earlier on sluggish demand for flat steel in the domestic and international markets. Revenue was lower at RM478 million against RM695 million in 2012.

The company said in its notes accompanying the results that the domestic steel market continued to be affected by rampant dumping by foreign steel producers and that the measures imposed by the authorities were generally ineffective.

It said together with the RM14 million foreign exchange losses that resulted from the weakening of the ringgit against the US dollar, the company incurred higher operating loss of RM66 million for the quarter under review.

The company’s property division on the other hand reported higher progress billing which accumulated to RM7.93 million in profit while its furniture division remained negligible with a loss of RM537,000.

Meanwhile, under the same Lion group of companies, Lion Diversified Holdings Bhd also saw its net loss increase to RM68.86 million for 1QFY13 from RM63.82 million a year earlier. Revenue was recorded lower at RM88.69 million from RM339.62 million in FY12.

Lion Diversified said in its filings with Bursa Malaysia that the unfavourable results were mainly attributable to lower sales by its direct reduced iron (DRI) operations which were due to the shutdown of its plant for maintenance during the quarter.

Lion Diversified’s property division registered a better set of results due to higher progress billings for its property project in China.

Going forward, the company said that although the implementation of the new steel policy on Feb 1, 2013 augured well for the local steel industry, the measures imposed by the authorities were generally seen as ineffective.

This article first appeared in The Edge Financial Daily, on November 27, 2013.