Egypt: Ezz Steel's flat steel production jumps 74% y-o-y in H1CY'21

Ezz Steel, a leading steel producer in Egypt and the MENA region, reported a sharp increase in its flat steel production in H1CY'21 (Jan-Jun'21), mainly due to the focus on the flats business and higher exports. However, its long steel production remained lower as compared to the corresponding period last year (CPLY), SteelMint learnt from the company results.

Flat steel production up 74%

The company's consolidated flat steel production was recorded at 1.04 million tonnes (mn t) in Jan-Jun'21, an increase of 74% as compared to 602,000 t in CPLY.

Long steel production stood at 1.44 mn t, a y-o-y decline of 18% compared to 1.77 mn t in H1CY'20. Semi-finished steel output in H1 also decreased by 21% against 1.89 mn t seen in CPLY..

In Q2, flat steel production rose by 9% q-o-q to 545,000 t against 500,000 t in Q1CY'21. Long steel output was at 728,000 t in Q2, marginally up over 715,000 t recorded in the previous quarter. Billets output dropped by 2% q-o-q to 740,000 t in the second quarter.

Flat steel sales shoot up

Flat steel sales saw a significant jump of 93% in H1CY'21 with 1.03 mn t, of which 54% was sold to the overseas market. Long steel sales fell by 12.5% in H1 to 1.35 mn t. Exports accounted for 11% of the total long steel sales.

In Q2, flat steel sales totalled 503,000 t with 57% export share, down 6% q-o-q. Long steel sales were up by 27.7% to 760,000 t with 8% export share.

Rising global iron ore and steel prices, positive impact from Covid-19 vaccination rollout and gradual recovery in the economy led to an increase in Ezz Steel's average HRC selling price to $931/t in Q2 from $758/t in Q1.

Local rebar consumption reached 3.36 mn t in H1, an increase of 2% y-o-y. However, consumption in Q2CY'21 rose by 24% over Q1 with national projects gathering steam. Growth pace in private building consumption is still slow, but are expected to pick up as clarifications on issuing building permits based on the new regulations are being given.

Financial performance in H1CY'21

• EBITDA in H1CY'21 was recorded at EGP 5,988 million ($382 million).
  
  
• Net sales amounted to EGP 30,417 million ($1,936 million).
  
  
• Net profit was at EGP 2,397 million ($153 million).
  
  

Outlook

The company is optimistic of seeing a strong growth in H2CY'21, partly supported by the commencement of issuing new building permits which are likely to boost rebar consumption in the country. Further, the company also plans to strengthen its position in the export market in the coming years. Presently, the company caters to 25 countries since 2020.