Thai Steel Cable 2Q 2009 earnings recover qoq but still slump

Thai Steel Cable (TSC) announced recovering 2Q09 earnings of Bt23mn (EPS Bt0.09), up 121% qoq, but still slumping 62% yoy. These Bt23mn earnings were from a rather low base impacted by the weak auto industry with production cuts and shutdowns. Sales have remained low at Bt365mn, down 38% yoy, although slightly up 2% qoq. This fall was inline with auto and motorcycle production falls of 46% and 39%, respectively, in the second quarter. The gross margin improved to 17% from 12% in the previous quarter from better cost savings but down from a normal 20% last year from the lower utilisation. The S. G. & A. was low qoq at Bt43mn, while down from last year on the 32% slump in sales and came from cost control activities. Interest was zero as TSC is a debt free operation.