Agha Steel Industries Limited reported a net loss of PKR 3.84 bln (USD 13.7 mln) for H1 FY25, a sharp increase from the PKR 219 mln loss in the same period last year. Revenue dropped 42.6pct YoY to PKR 5.3 bln (USD 19.1 mln) due to weak demand and pricing pressures in the steel industry.
Finance costs surged 24.4pct YoY to PKR 2.5 bln (USD 8.8 mln), while administrative, taxation, and other expenses further strained the company’s financials.
Sales volumes remained low, and a fire at its manufacturing facility on December 29, 2023, temporarily halted production, exacerbating revenue losses. The insurance claim settlement was also lower than expected, Agha Steel noted.
Despite macroeconomic stability under the USD 7 bln IMF Extended Fund Facility (EFF), challenges persist. Lower petroleum prices have eased inflation, and the current account recorded a USD 1.2 bln surplus, yet economic activity remains subdued. Large-scale manufacturing contracted by 1.25pct in July-November 2024, and the steel sector struggled with volatile prices, sluggish global demand, and rising local costs.
Agha Steel is implementing strategic measures to enhance efficiency and sustainability, including portfolio reviews, potential partnerships, and advanced technologies. Management expects improved business volumes in FY25 and anticipates generating sufficient cash flows to complete its rolling mill expansion. The installation of the MiDa Rolling Mill, an innovative low-capacity rebar plant by Danieli, will boost market share, production yield, and revenue, helping the company meet its financial obligations.
Additionally, the company is actively negotiating with lenders to restructure its long- and short-term loans under a proposed 10-year plan, which includes a three-year grace period.
Agha Steel operates an EAF plant in Port Qasim, Karachi, with an annual capacity of 450,000 tons for billets and 650,000 tons for rebar.
1 USD / 279.9 PKR
