NSC continues to bleed, loses P698 M in Q1

The National Steel Corp. (NSC) continues to lose, ending the first quarter with net losses of P698.045 million which is slightly better than its net loss of P759 million during the same period in the previous year.

Financial statements submitted to the Securities and Exchange Commission (SEC) show the Mindanao-based steel firm's operations are deteriorating and the impact of its closure last November was carried over to the first three months of the year.

With the plant barely producing enough volume prior to its closure, NSC's net sales from January to February was a measly P65.272 million, way below the net sales of about P1.399 billion in the previous period in 1999.

Making matters worse for the steel firm, its foreign exchange losses, a result of the deterioration of the peso versus the dollar, soared at P36.004 million from just P9.284 million in 1999. Its interest charges however, went down slightly at P502.711 million from P518.08 million in the previous year.

As a result of the closure of the plant, NSC's first quarter operating expenses consequently dropped to P41.506 million compared to P150.717 million during the same period in 1999.

At the end of the first quarter, NSC's deficit rose to P12.733 billion compared to P7.872 billion during the same period in the previous year.

The steel firm has recently gotten and extension of its suspension of debt payments by the Securities and Exchange Commission (SEC).

The SEC gave the steel firm until May 17 to submit its revised rehabilitation plan. The debt reprieve will keep NSC's creditors at bay while allowing it to fine tune its amended rehabilitation plan that will detail its strategies to reverse the financial losses of the company.

The interim receivers for NSC led by Monico V. Jacob, Guido Alfredo Delgado and Antonio Arizabal asked for the extension since they are still negotiating with creditor banks on how to resuscitate the company, the inputs of which will be reflected in the amended rehabilitation plan.

The receivers met the steering committee of creditor banks, including representatives from the Philippine National Bank, Land Bank of the Philippines, Global Bank and Credit Agricole.

The banks agreed to restore the company and to immediately preserve its assets to keep them from deteriorating. The banks also agreed to appoint a comptroller.