Thai Sahaviriya Steel sees record profit in 2011
Sahaviriya Steel Industries Pcl, Thailand's top hot-rolled steel coil maker, expects record profits this year, helped by a one-off gain of about USD 300 million from its purchase of a steel plant in Britain.
January 25, 2011 / 13:43 IST
Sahaviriya Steel Industries Pcl, Thailand's top hot-rolled steel coil maker, expects record profits this year, helped by a one-off gain of about USD 300 million from its purchase of a steel plant in Britain.
Sales at Sahaviriya should rise by 15% this year thanks to rising steel volume and higher global prices, President Win Viriyaprapaikit told Reuters in an interview."This year's net profit could be a record as our acquisition will enhance our competitive edge and sustain profitability," Win said.Hot-rolled steel coil prices are expected to stay above USD 800 per tonne in 2011, up from an average of USD 600 last year after flooding in Australia tightened supplies of coking coal and iron ore, pushing prices higher.Sahaviriya is buying a plant in Britain from Tata Steel for USD 500 million, but independent assessors said it was worth about USD 300 million more, allowing it to book a one-off gain.The deal is due to be completed in the first quarter, Win said.Production from the acquired plant would push up its earnings before interest, tax, depreciation and amortisation (EBITDA) to USD 500 million per year from USD 100 million recently, starting in the fourth quarter, Win said.After the takeover is completed, the company will become the largest fully integrated steel maker in Southeast Asia, Win said."We're doing the best we can to restart the Teesside plant sooner than the September plan because the market is really tight right now. The faster we restart it, the faster we can benefit and create jobs there," he said.Sahaviriya expected to hire at least 800 workers for the mothballed plant on top of the existing workforce of over 700, he added.Teesside Cast Products in Redcar, northern England, which at full capacity can produce 3.5 million tonnes of steel slab a year, was partially mothballed last February after Tata's Corus failed to find a long-term partner.Win said Sahaviriya was looking at listing on the London Stock Exchange."Once the acquisition is completed, almost half of our assets will be based in the UK. Therefore, it's only logical we consider this option," he said, declining to give further details. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
