Southern Steel Bhd

Southern Steel Bhd has a debt-to-equity ratio of 1.52, indicating a capital structure that is moderately leveraged. The company's liquidity position is assessed as medium, with a current ratio of 0.78, suggesting that it may struggle to meet short-term obligations without additional financing. The company's free cash flow is positive at 524,000 MYR, but its operating cash flow is negative at -29,885,000 MYR, indicating operational inefficiencies or high working capital requirements.

Profitability metrics show a return on equity of -1.89% and a return on assets of -0.59%, both of which are negative and significantly below the industry median for the Iron & Steel sector. The company reported a net loss of 10,882,000 MYR, with an operating income of only 2,583,000 MYR, highlighting a weak performance in controlling costs and generating profit.

The company's revenue is concentrated in a single business segment, with no disclosed geographic diversification in the latest financial data. This lack of diversification increases exposure to regional economic downturns and regulatory changes that could impact operations and revenue.

Southern Steel's growth trajectory is uncertain, with no disclosed revenue growth in the latest financial period and no forward-looking guidance provided in the outlook. The company's capital expenditure of -2,175,000 MYR suggests a reduction in investment in long-term assets, which may affect future production capacity and competitiveness.

The company faces a moderate risk of dilution, with a low probability of near-term dilution pressure and no expected issuance in the next 12 months. However, the risk assessment highlights a key flag: net cash is negative after subtracting total debt, indicating a potential liquidity constraint.

Recent filings and transcripts do not provide additional insights into the company's strategic direction or operational performance, as no material events or disclosures were identified in the latest data.

Revenue grew 19.3% year-over-year to MYR 2.68 billion, demonstrating strong top-line expansion despite recent net losses.

Long-term debt decreased significantly to MYR 272.5 million, reducing leverage and improving the company's balance sheet strength.

Cash conversion ratio of 2.75 exceeds the industry median of 0.74, indicating superior operational efficiency in generating cash.

Gross profit recovered to MYR 127.1 million, showing improved core profitability compared to the negative gross profit in FY-2.

Revenue CAGR of 11.4% over four years suggests consistent long-term growth potential in the iron and steel sector.

Net margin of -1.9% places the company in the bottom quartile of its peer cohort, signaling weak profitability.

High credit risk flag indicates significant financial distress potential, exacerbated by a debt-to-equity ratio of 1.52.

Return on equity of -1.9% ranks in the bottom quartile, reflecting poor returns generated for shareholders' capital.

Operating margin of 0.5% remains well below the industry median of 3.3%, indicating persistent competitive disadvantages.

Revenue MYR 2.39B, +3,4% YoY; Operating income −191,5% YoY.

• ▍Revenue MYR 2.39B, +3,4% YoY
• ▍Operating income −191,5% YoY
• ▍Net income −49,0% YoY
• ▍Free cash flow −192,9% YoY
• ▍Net margin -5.9%

Revenue MYR 2.31B, +32,6% YoY; Operating income +30,9% YoY.

• ▍Revenue MYR 2.31B, +32,6% YoY
• ▍Operating income +30,9% YoY
• ▍Net income −298,0% YoY
• ▍Free cash flow +15,1% YoY
• ▍Net margin -4.1%

Revenue MYR 1.74B; Operating income MYR 93.5M.

• ▍Revenue MYR 1.74B
• ▍Operating income MYR 93.5M
• ▍Net margin 2.8%