KUALA LUMPUR (May 15): Southern Steel Bhd (KL:SSTEEL) posted its fourth consecutive quarter net loss for the third quarter ended March 31, 2024 (3QFY2024) due to lower average selling prices (ASP) and sales volume.

In a filing with local bourse on Wednesday, the steel mill reported a net loss of RM6.43 million in 3QFY2024 or 1.08 sen per share, in contrast to its net profit of RM1.66 million or 0.28 sen per share a year earlier.

Its revenue for the quarter dropped 15.4% to RM551.66 million from RM652.06 million previously.

Southern Steel is controlled by tycoon Tan Sri Quek Leng Chan, who has an indirect stake of close to 70% stake.

For the nine-month period ended March 31, 2024 (9MFY2024), Southern Steel's net loss narrowed to RM56.9 million from RM123.51 million in the same period a year ago on improved margins. Revenue, however, slipped 4.71% to RM1.72 billion against RM1.8 billion in 9MFY2023.

Commenting on the outlook, the group expects the local steel industry to remain challenging as it continues to face structural overcapacity, weak demand and cheap imports.

"The group will continue to focus its attention on improving its operational efficiencies, inventory management and growing its downstream businesses," it said.

It noted that the Ministry of Investment, Trade and Industry (Miti) has set up an independent and special committee to assess the short and medium-term outlook and address the overcapacity issues.

"The committee will provide guidance on policies to support its carbon neutrality objectives and ensure the resilience and sustainability of the local steel sector," it added.

Shares of Southern Steel closed one sen or 1.71% lower to 57.5 sen on Wednesday, valuing the company at RM339.97 million.