Egypt’s biggest steel maker, Ezz Dekheila has seen its profit slip 94 percent in the year’s third quarter, as energy shortages and price surge took their toll during the period under review.
Ezz Dekheila’s net profit for the period under review sagged to LE55.6 million ($7.7 million) from LE962 million ($134.5 million) during the comparable period last year.
Revenues during the period under review for Egypt’s steel maker plunged 8 percent to LE9.5 billion.
“The company had to import scrap, an essential raw material in manufacturing steel, to compensate for a complete stop to the production of direct reduced iron manufacturing for a month and a half due to the suspension of gas supplies,” Ghada Alaa, steel analyst at Beltone Financial, told Al Ahram Online.
Steel makers use natural gas to lessen iron ore before treating it to make steel.
Over the past couple of years, Egypt has been struggling with energy shortages and increasing rising consumption. This is more evident in the summer months which fall in the third quarter.
“Profitability in the third quarter was also squeezed due to hikes in the price of natural gas, electricity and taxes,” Al Ahram Online quoted Alaa as having said.
President Abdel-Fattah El-Sisi, who came to power in July this year, has made sure that his administration cut energy subsidies.
