Karachi: Aisha Steel Mills Limited (ASML) reported a substantial decline in profits for the third quarter ending March 31, 2025, as revealed in the Directors' Review Report and condensed interim financial statements. The period from July 2024 to March 2025 saw a significant downturn in sales and production figures, with the company grappling with heightened finance costs and market competition.
During the December 2024 to March 2025 quarter, Hot Rolled Coil (HRC) prices remained stable at approximately $470, FOB China. However, potential escalations in the ongoing trade war between China and the United States could disrupt commodity prices, including HRC. Chinese HRC prices may decline due to increased export restrictions, while American and European prices could see an upward trend. The influx of cheaper Chinese Cold Rolled Coils (CRC) and HRC into the Pakistani market has pressured local mills to reduce prices to maintain sales, despite an improvement in demand for CRC and Galvanized Iron (GI).
The operational performance of ASML during the July 2024 to March 2025 period reflected a decrease in total sales quantity to 95,528 tons, down from 119,676 tons in the corresponding period last year. Export quantities also declined significantly, with only 6,294 tons exported compared to 18,185 tons previously. Production figures were similarly impacted, with a decrease to 104,892 tons from 126,444 tons in the prior year.
Financially, ASML's revenue for the period was recorded at Rs. 21,793 million, a sharp decline from Rs. 31,436 million in the previous year. Gross profit plummeted to Rs. 634 million from Rs. 3,450 million, while finance costs were reduced to Rs. 2,265 million from Rs. 2,908 million. The company reported a net exchange loss of Rs. 24 million, contrasting with a gain of Rs. 224 million last year. The loss before tax stood at Rs. 1,823 million, a significant drop from a profit of Rs. 87 million, and the loss after tax was Rs. 1,385 million, compared to a profit of Rs. 223 million in the same period last year. Earnings per share fell to a loss of Rs. 1.56 from a profit of Rs. 0.15.
According to information available from the Pakistan Stock Exchange (PSX), ASML's performance in the domestic flat steel industry continues to face challenges due to the influx of Galvalume Coils from China. These imports are intended to circumvent antidumping duties imposed by the National Tariff Commission on galvanized coils. An anti-circumvention case filed with the NTC is progressing, with a resolution anticipated within the financial year.
Looking ahead, ASML is cautiously optimistic about potential export opportunities, given the rising prices in the American and European markets. However, the local demand remains slow but steady, with declining prices for key raw materials like iron ore and coke offering some relief.
The directors expressed their gratitude to stakeholders and acknowledged the support of banks and regulators in sustaining operations.