KUALA LUMPUR (May 25): Southern Steel Bhd’s net profit for the third quarter ended March 31, 2022 (3QFY22) fell to RM3.14 million, a 92.31% decrease from RM40.83 million last year, as rising costs eroded its profit margin.

Earnings per share plummeted to 0.53 sen from 6.85 sen, according to the steel products manufacturer’s bourse filing on Wednesday (May 25).

This was despite a quarterly revenue increase of 19.83% to RM591.12 million from RM493.28 million in 3QFY21, on the back of higher selling prices.

The group did not declare a dividend for the quarter under review.

On a quarter-on-quarter basis, Southern Steel’s net profit fell 90.82% from RM34.23 million in 2QFY22, while its revenue slipped 9.28% from RM651.56 million.

For the cumulative nine-month period (9MFY22), the group’s net profit more than doubled to RM69.48 million from RM23.46 million in the corresponding period last year, while its cumulative revenue jumped 25.11% to RM1.73 billion from RM1.38 billion.

“The higher revenue and [profit] for the financial year-to-date were due to higher selling prices and improved margins,” it said.

The group noted that while selling prices have moved up due to escalating input costs, it expects the demand for its products to stay moderate in view of the continued supply chain disruption and developing geopolitical risks.

“Barring any unforeseen circumstances, the board expects the group’s performance to be satisfactory for the financial year ending June 30, 2022 (FY22),” it added.

Shares in Southern Steel finished one sen or 1.25% lower at 79 sen on Wednesday, giving the group a market capitalisation of RM471.09 million.