Pakistan: Agha Steel's Q1FY24 profit drops amid economic headwinds

Agha Steel Industries Limited, a prominent long steel producer in Pakistan, reported an 18.3% y-o-y decline in its first quarter profit for FY24, with an after-tax profit of PKR 125.238 million ($446,946). This drop is attributed to significant economic and political challenges facing Pakistan including low foreign reserves, high foreign exchange rates, elevated inflation, steep interest rates, and soaring fuel and energy prices. Government restrictions on imports have disrupted supply chains, leading to raw material shortages and reduced sales and production volumes.

In the first quarter of FY24, Agha Steel achieved net sales of PKR 6,198 million ($22.12 million), a 12.6% increase over the previous year.

Its worth noting that in September Agha Steel also announced plans to commission a 50,000 t/year blast furnace, with completion scheduled for early 2025.

Agha Steel has an annual rebar production capacity of 240,000 t and is actively expanding its production capacity. The company has acquired an additional 17 acres of land near its current facility to set up a new re-rolling mill. This expansion is expected to substantially increase Agha Steel's annual production capacity to 450,000 t of billets and 650,000 t of rebars, with the project scheduled for completion by the end of the year. All the sales figures mentioned are based on the exchange rate: 1 USD/280 PKR.