KUALA KUMPUR (May 6): Southern Steel Bhd chalked up its third consecutive quarterly loss with a net loss of RM35.58 million in its third financial quarter ended March 31, 2015 (3QFY15), compared with a net profit of RM7.47 million a year ago, due to further erosion of margins from lower selling prices.

Revenue also fell 4.35% to RM675.36 million, from RM706.09 million in 3QFY14, its filing to Bursa Malaysia today showed.

For the cumulative nine months period (9MFY15), Southern Steel (fundamental: 0; valuation: 1.2)’s net loss stood at RM116.34 million, compared with its net profit of RM5.56 million in the same period last year. Revenue meanwhile, was down 8.14% to RM1.919 billion, from RM2.089 billion.  

The group said the lower earnings was also attibutable to a one-off impairment of investment of RM17.4 million in an associated company.  

"Loss before tax (LBT) for the financial year-to-date also includes the group's share of impairment recognised by an associated company of RM14 million," it said.  

On prospects, Southern Steel said in the medium term, the excess steel production is expected to depress steel prices.  

"Regardless, the group continues to adopt measures to mitigate the eroded margin," it added.  

The steel players expects its operating results to improve in the fourth quarter of the financial year ending June 30, 2015.  

Southern Steel shares closed down 2 sen or 2% at 98 sen today, with 100,000 shares traded. Its market capitalisation was RM411.03 million.

(Notes: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)