Agha steel’s net profit rose to PKR1,057mn ($6.72mn) in H1 FY2020 (July-Dec), up by 43pc from H1 FY2019 on increased sales volume and improved steel prices in Q2. The company’s H1 turnover increased by 45.9pc from a year ago to PKR10,279mn.
Growth prospects and business sentiments have improved in CY2021, according to Agha steel’s earnings release. However, Pakistan’s actual economic performance depends on the impact of the second wave of COVID-19 infections and global economic recovery post the vaccination drives. The projected broad-based recovery after the effects of the pandemic subside is expected to provide stimulus to the country’s steel sector.
The Pakistani government has provided tax reliefs and incentives for the construction and development sectors and the government-funded projects are expected to drive steel demand. Fulfilment of China-Pakistan Economic Corridor (CPEC) projects, dam construction is also expected to start in 2021. The government has earmarked PKR 30bn subsidies for the Naya Pakistan Housing Scheme (NPHS) in the 2020 budget, which could create additional demand for steel.
Based on the current macro-economic conditions, the outlook of Pakistan’s steel sectors is expected to improve over the short to medium term.
Agha steel has successfully raised equity and listed on the Pakistan Stock Exchange. The company managed to raise PKR3,800mn in equity to fund its final phase of expansion.