3 : 1 3 : 1 Win Viriyaprapaikit President Nitiphong - - PowerPoint PPT Presentation

▶
3 1 3 1
SMART_READER_LITE
LIVE PREVIEW

3 : 1 3 : 1 Win Viriyaprapaikit President Nitiphong - - PowerPoint PPT Presentation

Nov 22, 2023 107 likes •430 views

Analyst Meeting Q2/ 20 10 Q / July 29, 20 10 3 : 1 3 : 1 Win Viriyaprapaikit President Nitiphong Tejavanija CFO Disclaim er Disclaim er The information contained in this presentation is intended solely for your personal

slide-1
SLIDE 1

Analyst Meeting Q2/ 20 10 Q / July 29, 20 10

3 : 1 3 : 1

Win Viriyaprapaikit President Nitiphong Tejavanija CFO

slide-2
SLIDE 2

Disclaim er Disclaim er

The information contained in this presentation is intended solely for your personal reference

  • nly. If you are not an intended recipient, you must not read, disclose, copy, circulate , retain, distribute
  • nly. If you are not an intended recipient, you must not read, disclose, copy, circulate , retain, distribute
  • r take any action in reliance upon this material.

This presentation is not intended to substitute your own analysis and investigation, and should b id d d i i i f hi i i d not be considered a recommendation to any recipient of this presentation. Some statements contained herein are forward-looking statements identified by the use of forward- looking terminology such as “may” , “will” , “expect” , “anticipate”, “intend” , “estimate” , “continue”, “plan” or other similar words, which are subject to various risks and uncertainties These statements include statements with respect which are subject to various risks and uncertainties. These statements include statements with respect to the Company’s corporate plans, strategies and beliefs and other statements that are not historical facts. This presentation is prepared based on the assumptions and beliefs of Sahaviriya Steel Industries Public Company Limited (the “Company” or “SSI”)’s management in light of the information currently available to the Company involving risks and uncertainties which may cause the actual results, performance or achievements to be materially different from any future results performance or performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Nothing in this presentation is,

  • r shall be relied on as promise or representation of the Company as to the future.

2

Sahaviriya Steel Industries PLC, 2Q10 Analyst Meeting

slide-3
SLIDE 3

AGENDA AGENDA

  • Perform ance Highlights
  • Perform ance Highlights
  • Operating Results
  • Operating Results
  • Outlook & Strategies
  • Outlook & Strategies

3

Sahaviriya Steel Industries PLC, 2Q10 Analyst Meeting

slide-4
SLIDE 4

Hitting operating profit target, despite softer sales volum e due to m arket correction

R f h R f h

Integration Integration Prem ium Value Prem ium Value Reduce Cost Reduce Cost Grow sales Grow sales

M i i P i M i i P i b d i b d i S f l l S f l l

p

  • Reap further synergy

with TCRSS

  • Develop new businesses

at two subsidiaries

  • Reap further synergy

with TCRSS

  • Develop new businesses

at two subsidiaries

CTION CTION

  • Maximize Premium

Value Products (high- grade & unique )

  • Invest in technology
  • Maximize Premium

Value Products (high- grade & unique )

  • Invest in technology
  • 250 mb cost reduction

target for 2010

  • Soften production

volume resulting in

  • 250 mb cost reduction

target for 2010

  • Soften production

volume resulting in

  • Softer sales volume

resulting in higher slab inventory

  • Focus on sales
  • Softer sales volume

resulting in higher slab inventory

  • Focus on sales

at two subsidiaries, shifting from “Cost center” to “Profit center” at two subsidiaries, shifting from “Cost center” to “Profit center”

ONTINUAL AC ONTINUAL AC

  • Invest in technology,

people and R&D to develop future high- grade products

  • Invest in technology,

people and R&D to develop future high- grade products volume, resulting in higher conversion cost volume, resulting in higher conversion cost

  • Focus on sales

expansion of Premium Value Products

  • Focus on sales

expansion of Premium Value Products

CO CO

  • Sold 92k tons to TCR in
  • Sold 92k tons to TCR in
  • Sold Premium Value
  • Sold Premium Value
  • Sold 545k tons in Q2/ 10
  • Sold 545k tons in Q2/ 10
  • Cost-saving of 110 mb in
  • Cost-saving of 110 mb in

RESULT RESULT

Sold 92k tons to TCR in Q2 (-12% q-o-q)

  • Profit contribution from

TCR 69.3 mb, WCE 10.8 mb and PPC 22 4 mb Sold 92k tons to TCR in Q2 (-12% q-o-q)

  • Profit contribution from

TCR 69.3 mb, WCE 10.8 mb and PPC 22 4 mb Sold Premium Value Products 232k tons in Q2, (43% of total sales volume)

  • Achieved 24% rolling

margin Sold Premium Value Products 232k tons in Q2, (43% of total sales volume)

  • Achieved 24% rolling

margin Sold 545k tons in Q2/ 10,

  • 21% q-o-q
  • Domestic market share is

estimated at 39%, Sold 545k tons in Q2/ 10,

  • 21% q-o-q
  • Domestic market share is

estimated at 39%,

Cost saving of 110 mb in 1H10

  • Productivity rate down

q-o-q to 376 ton/ hr from 429 ton/ hr in Q1/ 10 but rose y o y from 348 ton/ hr Cost saving of 110 mb in 1H10

  • Productivity rate down

q-o-q to 376 ton/ hr from 429 ton/ hr in Q1/ 10 but rose y o y from 348 ton/ hr

Q2 / 2010 R Q2 / 2010 R

mb, and PPC 22.4 mb mb, and PPC 22.4 mb margin

  • 4 new products in 2Q10
  • 13 new products and

3 domestic customers in margin

  • 4 new products in 2Q10
  • 13 new products and

3 domestic customers in

  • Exported 19 k tons, -71%

q-o-q

  • Additional inventory

provision 544 mb

  • Exported 19 k tons, -71%

q-o-q

  • Additional inventory

provision 544 mb

rose y-o-y from 348 ton/ hr in Q2/ 09

  • Yield loss dropped to 1.5%

from 1.7% in Q2/ 09 and Q1/ 10 rose y-o-y from 348 ton/ hr in Q2/ 09

  • Yield loss dropped to 1.5%

from 1.7% in Q2/ 09 and Q1/ 10

4

Q

3 domestic customers in 1H10 3 domestic customers in 1H10

  • Conversion cost rise q-o-q to

USD68/ ton from USD 59/ ton in Q1/ 10

  • Conversion cost rise q-o-q to

USD68/ ton from USD 59/ ton in Q1/ 10

Sahaviriya Steel Industries PLC, 2Q10 Analyst Meeting

slide-5
SLIDE 5

Softer volum e of 544,761 tons, With slightly lower sales of Prem ium Value Products

Sales Volume by product category (unit : million tonne)

g y

0.68 30% 31%

High‐grade Premium

0.49 0 43 0.48 0.54 19% 14% 17% 13% 14% 12% 10% 20% 29% 28% 31%

g g Unique Value Products

0.43 0.35 71% 66% 54% 59% 56% 57% 19%

Commodity product

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10

5

Sahaviriya Steel Industries PLC, 2Q10 Analyst Meeting

slide-6
SLIDE 6

Continue developm ent on Prem ium Value Continue developm ent on Prem ium Value Products from Q Products from Q1

  • ducts
  • Q
  • ducts
  • Q

Industry / Production Application

Handlebar part for motorcycle Handlebar part for motorcycle European Standards (EN Standards) European Standards (EN Standards)

New Products

Gear part for motorcycle Gear part for motorcycle

6

Sahaviriya Steel Industries PLC, 2Q10 Analyst Meeting

slide-7
SLIDE 7

Sm aller dom estic m arket share due to higher im port volum e, and less export volum e due to the softening prices a d ess e po t o u e due to t e so te g p ces

Export Volum e Dom estic Market Shares

63,806

Export Volume (tonne)

60%

Domestic Market Share in 2007 ‐ 2010

48,698 48,478 51,786 63,806

20% 30% 40% 50% 60%

25,274 18,644

2008 2009 1Q10 2Q10e SSI 19% 34% 45% 39% 0% 10% 20%

S ISIT SSI’ i

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10

Other local supplies 29% 24% 16% 20% Import 52% 42% 39% 41%

Source : ISIT, SSI’s estimates

7

Sahaviriya Steel Industries PLC, 2Q10 Analyst Meeting

slide-8
SLIDE 8

Sold less quantity, with higher raw m aterial inventory

  • Mil. tonne

8

Sahaviriya Steel Industries PLC, 2Q10 Analyst Meeting

slide-9
SLIDE 9

Lower production volum e, with higher conversion cost

Conversion cost ($/tonne) and Yield loss 1.7% 1.7% 1.6% 1.5% 1.5% 1.7%

100 1.60% 1.80%

69 56 69 60 59 68 69 52 50 47 43 53

40 60 80 0.60% 0.80% 1.00% 1.20% 1.40% 20

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10

0.00% 0.20% 0.40%

Real Normalized Yield loss

Monthly Production Volume ('ooo tonne) Monthly Conversion Cost ($/tonne)

200 250 300 2Q10

60 80 100 120 2Q10

2009 average = 65 2009 1Q10 2009 2010 average = 206 2010 average = 62 50 100 150 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2009 average = 156 shutdown

20 40 60 J F b M A M J J l A S O t N D

2009 shutdown 1Q10

9

p y g p

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Sahaviriya Steel Industries PLC, 2Q10 Analyst Meeting

slide-10
SLIDE 10

Internal stretched target of

  • Bt. 250 m illion cost saving in 20 10

g

2010 Target 1H10 Actual 2009 Actual

Non- permanent Permanent Non- permanent Permanent 40 5 10 Non- permanent Permanent Cost killer 26 57 85 17 25 4 Cost reduction improvement 118 97 Energy saving 77 Outsource & Zero OT 2 Workforce 9 Admin 45 Non-direct cost cutting

  • 8

100 20 53 25 84 Maintenance cost 193 230

10

250 110 423 Sahaviriya Steel Industries PLC, 2Q10 Analyst Meeting

slide-11
SLIDE 11

Prudently provisioning on inventory value while the m arket is bottom ing out g

Million Baht Coil Inventories 152 Slabs on hand and in transit 324 Slabs ordered 68 Total 544

11

Sahaviriya Steel Industries PLC, 2Q10 Analyst Meeting

slide-12
SLIDE 12

Existing tax benefits renders enhanced earnings

Tax Shield Tax Shield

  • A total of 3,828 million baht of losses carried

forward

  • This tax shield is usable until 2014
  • A total of 3,828 million baht of losses carried

forward

  • This tax shield is usable until 2014

Tax Shield Tax Shield

  • Earnings from the first 1.6 million of tones of output

produced and sold in each calendar year is exempt f t i t d th BOI i il

  • Earnings from the first 1.6 million of tones of output

produced and sold in each calendar year is exempt f t i t d th BOI i il BOI Tax Privilege BOI Tax Privilege from corporate income tax under the BOI privilege. from corporate income tax under the BOI privilege.

12

Sahaviriya Steel Industries PLC, 2Q10 Analyst Meeting

slide-13
SLIDE 13

AGENDA AGENDA

  • Perform ance Highlights
  • Perform ance Highlights
  • Operating Results
  • Operating Results
  • Outlook & Strategies
  • Outlook & Strategies

13

Sahaviriya Steel Industries PLC, 2Q10 Analyst Meeting

slide-14
SLIDE 14

Quarterly Key Perform ance Com parison

20 10 / Q2 20 0 9 / Q2

% Change

TION

Sales volume (mmt) 544,761 431,510 26% Production volume* (mmt) 553,476 440,004 26% Utilization rate (%) 55% 44% 11%

OPERAT

Utilization rate (%) 55% 44% 11% Productivity rate (ton/ hdw) 376 348 8 % Yield loss* (%) 1.49% 1.66%

  • 0 .17%

Consolidated: Sales revenues (mil.Bt.) 11,808 7,776 52% S i ( il ) %

NCIAL

Service revenues (mil.Bt.) 79 54 45% Inventories provision (reversal) (mil.Bt.) 463

  • 1,793
  • 123%

Operating cost (excl. fin.cost) (mil Bt.) 10,854 6,838 59%

FINAN

p g ( ) ( ) , 54 , 3 59 Financial cost (mil Bt.) 198 286

  • 31%

Net profit (mil.Bt.) 918 684 34% 14 EPS (Bt./ share) 0.07 0.05 40 %

* HSM + HFL Sahaviriya Steel Industries PLC, 2Q10 Analyst Meeting

slide-15
SLIDE 15

Production Production – – 20 10 20 10 / Q / Q2 2

s

+ 10 1%

t: Mn Tonnes

+ 26%

  • 19%

Uni

  • Production volume in 2Q10 up +26% y-o-y and down -19% q-o-q

15

Sahaviriya Steel Industries PLC, 2Q10 Analyst Meeting

slide-16
SLIDE 16

Shipm ent Shipm ent – – 20 10 20 10 / Q / Q2 2

es

+ 57% + 26%

  • 20 %

it: Mn Tonne Uni

  • Q2 sales volume grew +26% y-o-y and -20% q-o-q

16

Sahaviriya Steel Industries PLC, 2Q10 Analyst Meeting

slide-17
SLIDE 17

Sales Breakdown Sales Breakdown -

  • Q

Q2 2 / H / H1 1 FY FY10 10

By market

Premium value Commercial grade

By segment 43% 32% 43%

Commercial‐grade

66% 57% 68% 57% 34% 43% 2Q09 2Q10 1H09 1H10 2Q10 Export 1H10 Export

17

Sahaviriya Steel Industries PLC, 2Q10 Analyst Meeting

slide-18
SLIDE 18

Price of Product and Rolling Margin Price of Product and Rolling Margin

Tonnes

+20% +20% +26% +8 %

Unit: US$ / T

Rolling ‐20% 23% 45% 1% 22% 26% 23% 24% margin* ‐20% 23% ‐45% 1% 22% 26% 23% 24%

Rem ark * C i 18 * HRC Price * Rolling margin = metal spread / HRC selling price * 100

Sahaviriya Steel Industries PLC, 2Q10 Analyst Meeting

slide-19
SLIDE 19

Price and Volum e of Raw m aterial Im port Price and Volum e of Raw m aterial Im port

nnes

+ 25% 2% + 98 %

Unit: Mn Ton

Price* 390 ‐ 500 ‐ 460 ‐ 370 ‐ 350 ‐ 460 ‐ 440 ‐ 535 ‐ Price US$/t 390 400 500 510 460 470 370 380 350 360 460 470 440 450 535 545

Rem ark 19 * Import price of slab is based on CIF

Sahaviriya Steel Industries PLC, 2Q10 Analyst Meeting

slide-20
SLIDE 20

EBITDA (US$/ TONNES) EBITDA (US$/ TONNES)

S

86 54 94 77 97

+ 151% + 28 7% + 26%

US$/TONNES

1H09 1H10 ‐52 54 Q109 Q209 Q309 Q409 Q110 Q210

Unit: U

‐167 ‐309

20

Sahaviriya Steel Industries PLC, 2Q10 Analyst Meeting

slide-21
SLIDE 21

Consolidated Sales Revenue Consolidated Sales Revenue

ht

+77% +77%

llion Baht

  • 14%

t: Million Bah Unit: Mil

+52%

Uni

  • Consolidated sales revenue in 2Q10 up +52% y-o-y but down -14% q-o-q

21

Sahaviriya Steel Industries PLC, 2Q10 Analyst Meeting

slide-22
SLIDE 22

Consolidated Service Revenue Consolidated Service Revenue

ht

+ 37% + 37% + 45% +12%

t: Million Bah

45%

Uni

  • Consolidated sales revenue in 2Q10 up +45% y-o-y and +12% q-o-q

22

Sahaviriya Steel Industries PLC, 2Q10 Analyst Meeting

slide-23
SLIDE 23

Consolidated EBITDA Consolidated EBITDA

  • 1%

+ 180% + 180% + 355%

Million Baht Unit: M

  • EBITDA in 2Q10 up +355% y-o-y, but down 1% q-o-q

23

Sahaviriya Steel Industries PLC, 2Q10 Analyst Meeting

slide-24
SLIDE 24

Consolidated Net Profit Consolidated Net Profit

  • 37%

+ 3 % + 299% + 299% 37 + 34%

Million Baht Unit: M

  • Net profit in 2Q10 up 34% y-o-y but down 37% q-o-q

24

Sahaviriya Steel Industries PLC, 2Q10 Analyst Meeting

slide-25
SLIDE 25

Consolidated Profit & Loss Statem ent Consolidated Profit & Loss Statem ent

Million Baht 2Q09 1Q10 2Q10 YoY% QoQ% Sales & Service Income 7,830 13,865 11,886 52% (14%) , , , ( ) Gains(Loss)on exchange 85 100 36 (58%) (64%) Interest and Other Income 10 11 6 (33%) (42%) Total Revenues 7,925 13,976 11,928 51% (15%) Total Revenues 7,925 13,976 11,928 51% (15%) Cost of Sales & Services 8,661 12,080 10,090 16% (16%) SG&A 135 266 232 72% (13%) Loss on diminution of Inventories (1 973) (23) 463 (123%) (2 117%) Loss on diminution of Inventories (1,973) (23) 463 (123%) (2,117%) Loss on Litigation 14 (100%) #DIV/0! Loss from contingent Liablities 68 #DIV/0! #DIV/0! L f I t t i TCR 107 (64) (69) (165%) 8% Loss from Investment in TCR 107 (64) (69) (165%) 8% Financial cost 286 226 198 (31%) (13%) Income Tax 11 7 #DIV/0! (31%) Total Expenses 7,232 12,496 10,989 52% (12%) Minority Interest (9) (25) (22) 134% (14%) Net Profit (Loss) 684 1,456 918 34% (37%)

25

Sahaviriya Steel Industries PLC, 2Q10 Analyst Meeting

slide-26
SLIDE 26

Consolidated Balance Sheet Consolidated Balance Sheet

Asset (Million Baht) 30‐Jun‐09 31‐Mar‐10 30‐Jun‐10 YoY% QoQ% Current Assets 10,790 15,597 17,591 63% 13% Non‐current Assets 25,593 24,953 24,756 (3%) (1%) Total Assets 36,383 40,550 42,347 16% 4% Current Liabilities 13,980 16,205 17,236 23% 6% , , , Short‐term Liabilities 3,648 1,790 2,379 (35%) 33% Trade financing loans 7,745 9,407 9,655 25% 3% Other current liablilites 2 586 5 007 5 202 101% 4% Other current liablilites 2,586 5,007 5,202 101% 4% Long‐term Liabilities 6,962 5,220 5,168 (26%) (1%) Long‐term Loans 6,945 5,212 5,164 (26%) (1%) Oth Li biliti 17 7 4 (74%) (39%) Other Liabilities 17 7 4 (74%) (39%) Total Liabilities 20,941 21,425 22,404 7% 5% Share Capital 13,101 13,101 13,101 0% 0% Retained Earning (Unappropriated) (3,524) 397 1,314 (137%) 231% Total Company Shareholder's Equity 14,673 18,308 19,132 30% 5% Minority Interest 769 817 810 5% (1%) Total Liabilities & Equity 36,383 40,550 42,347 16% 4%

26

Sahaviriya Steel Industries PLC, 2Q10 Analyst Meeting

slide-27
SLIDE 27

TCRSS Operation Highlights TCRSS Operation Highlights

373 366

Shipment

Shipm ent & Production (‘0 0 0 ton) Volum e breakdown by segm ent

Premium-grade High-grade

159 190 149 183 136 148 182 184 176 137

Production

30% 51% 60% 35% 48% 43% 40% 45%

80 80 65 83

70% 49% 40% 65% 52% 57% 60% 55% 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 1H09 1H10

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 1H09 1H10

Inventory (‘0 0 0 ton) and Turnover (day)

Debt / Equity (tim e) Debt / Equity (tim e)

190 Shipment

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 1H09 1H10

0.81 0.83 0.79 0.80 0.75 0.75 183 190 149 136 133 115 98 59 53 51 40 56 64 120 140 160 180 200 50 60 70 80 p Inventory Turnover 80 80 98 45 54 66 40 20 40 60 80 100 10 20 30 40

27

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 20 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 10

Sahaviriya Steel Industries PLC, 2Q10 Analyst Meeting

slide-28
SLIDE 28

AGENDA AGENDA

  • Perform ance Highlights
  • Perform ance Highlights
  • Operating Results
  • Operating Results
  • Outlook & Strategies
  • Outlook & Strategies

28

Sahaviriya Steel Industries PLC, 2Q10 Analyst Meeting

slide-29
SLIDE 29

Outlook for the rest of Outlook for the rest of 20 10 20 10

  • Continued strong demand from

hi grade sector

  • Sales opportunity for high-

grade products hi-grade sector

  • Domestic purchase post

market correction grade products

  • Towards 3 million ton platform

market-correction

  • Mid-range raw materials

spot-price

  • Lower overall market risk;

passing on cost to end- spot price

  • Uncertainty in EU economic

passing on cost to end consumer no longer an issue

  • Steel capacity utilization in

Uncertainty in EU economic

  • utlook past debt-crisis
  • Developed world austerity

Steel capacity utilization in check

  • Continued restraint on

p y measures (including US?)

  • China policy post property-

commodity prices

29

bubble-control and upcoming bank loan trouble

Sahaviriya Steel Industries PLC, 2Q10 Analyst Meeting

slide-30
SLIDE 30

Outlook for Q3/ 20 10

  • Sales drive amid market bottoming out
  • Rolling margin protection whilst inventory

adjustment j

  • Higher production utilization rate
  • HRC price is expected to rise 5-7%
  • Raw materials cost are expected to rise between

18-20%

30

Sahaviriya Steel Industries PLC, 2Q10 Analyst Meeting

slide-31
SLIDE 31

Thank You Thank You

31

Sahaviriya Steel Industries PLC, 2Q10 Analyst Meeting