Welspun Corp reports Rs 97.5 crore net loss

Leading steel pipes manufacturer Welspun Corp, the flagship company of the Rs 18,000-crore Welspun Group, today reported a net loss of Rs 97.5 crore for the three months to June against net profit of Rs 7.7 crore in the year-ago period.

Net sales also plunged, and nearly halved to Rs 1,426.1 crore from Rs 2,249.1 crore. The company did not offer any reason for the drop in sales or depleted bottomline.

However, the situation would be better in coming months as it has order-book of over 1 million tonne, the Mumbai-based company said in a statement.

Production declined to 213 kmt from 320 kmt while sales volume declined to 216 kmt from 308 kmt.

The company said its current pipe orders stood at around 993 kmt, worth Rs 6,400 crore, indicating a pick-up in ordering activity in the Americas.

"The line pipe business is showing visible signs of significant revival as the North American and Latin American pipeline markets are quite strong as several projects already announced and several more in the pipeline," the company, which nets over 70 percent of business from overseas markets, said.

The Middle East continues to be robust with demand from Saudi Arabia, the UAE and Iraq. Europe also continues to be strong, it added.

On the domestic market, it said with the new government's focus on pipelines, ordering activity is expected to pick up in the medium-term.

Commenting on the results, group chairman B K Goenka said, "While the business environment has been challenging, affecting realisation and profitability, we are seeing strong signs of pick-up in ordering activity across geographies, especially the Americas and in the domestic market.

"We have a strong order book of close to 1 million tonne. In addition, we have bids outstanding of close to 6 million tonne with another 4 million tonne of bids coming up in the near-term. Looking at the current environment, we strongly believe that good days are ahead of us," Goenka said.

Welspun Corp has a capacity of 2.425 million tone in Dahej, Anjar and Mandya in the country, Little Rock in the US and Dammam in Saudi Arabia.