TKC Steel posts 160% revenue hike in 9 mos

Local steel giant TKC Steel Corp. registered a 160 percent growth in revenues to P3.3 billion in the first nine months of this year from only P1.25 billion a year ago, mainly due to higher sales volume.

TKC attributed the jump in revenues to increased billet production of subsidiary Treasure Steelworks Corp., the start of commercial operations of its China-based unit Zhang Zhou Stronghold Steel Works Co., and the  and favorable price trend.

Treasure Steel posted record-high revenues of P3.1 billion during the period under review, 148 percent higher than the previous level. Sales volume expanded by 68.3 percent to 124,843 metric tons (MT) from only 74,187 MT.

Zhang Zhou, which started commercial operations only in late second quarter of 2007, recorded revenues of P157.8 million, P91.88 million of which came from the period July to September 2007.

“We are very pleased about the growth in revenues from both our operating subsidiaries. Even more important is that TKC Steel is on its way to strengthening both our local and regional business that we deliberately set out for in time for our follow-on offering. The continued exceptional financial performance is an excellent indicator towards this direction,” said TKC president Anthony S. Dizon.

TKC Steel recently signed a deal with China-based import and export company, Xiamen Xindeco Ltd., to supply the country’s first blast furnace that will double the production capacity of the company’s local plant from 300,000 MT to 600,000 MT annually by the fourth quarter of 2008.

 Zhang Zhou is likewise set to double its production capacity for spiral pipes from 40,000 MT to 80,000 MT with the addition of a new production line that will be fully operational by the first quarter of next year.

Funding for expansion would come from TKC’s planned additional share offering of up to 235 million common shares to the public, estimated to raise as much as P2.9 billion.  The shares, which comprise five percent of TKC’s total issued and outstanding stock, will be sold at a price ranging from P8 to P11.50 per share.

The final offer price will be announced on Nov. 7 while the offering period will run from Nov. 9 to 15. Listing of the shares has been set on Nov. 21.

TKC Steel is part of the Tiu Group of Companies that also owns several businesses in the financial servicing and hospitality and tourism sectors. Among them are iRemit, an overseas remittance services company, Sterling Bank of Asia and the Discovery Hotel chain.