The board of Al Ezz Dekheila Steel Co. - Alexandria (EZDK) has proposed the distribution of cash dividend for H1-14 at EGP 133.644 million, or EGP 10 per share.
The company’s consolidated net profit of EGP 38.6 million for H1-14 fell by 94.5% compared with EGP 705.3 million net profit in the same period a year earlier.
Meanwhile, standalone financial results for the same period showed EGP 183.6 million net profit, compared with EGP 696.9 million in H1-13.
FY13 net profit had grown 46% to EGP1.15 billion, compared with EGP 792 million in FY12. Hany Genena, CFA, Head of Research, Pharos Securities Brokerage, said these financial results were outright negative.
Full financials have not yet been released. However, as has been the case during Q1-14, the steep decline in net profit y/y is likely attributed to the shift from the relatively cheap iron ore to the more expensive scrap as a raw material, amid severe shortages in natural gas supply, according to the analyst.
“We remind readers that EZDK is the only integrated steel mill in Egypt and within the group of sub¬sidiaries owned by Ezz Steel. Given that the natural gas shortage crisis has been accentuating since August and up to date due to the continued diversion of supply to thermal power stations, we expect EZDK results to remain subdued until the end of 2014, at least,” said Genena.
Accordingly, Genena changed his recommendation from BUY to HOLD.