KUALA LUMPUR: Southern Steel Bhd's (SSteel) net profit fell by annual pace of 47.3% to RM34.62 million in the third quarter ended Sept 30, 2009 (3Q09) from RM65.7 million, as revenue dropped amid lower steel demand and lower prices for the company's products.

Revenue fell 38.8% to RM561.88 million from RM918.44 million, while basic earnings per share (EPS) fell to 8.30 sen from 15.70 sen. It declared a tax exempt second interim dividend of 2.5 sen per share versus five sen per share a year earlier.

For the cumulative nine month period, the group incurred a net loss of RM43.53 million versus a net profit of RM364.54 million a year earlier, while revenue dipped 47.3 % to RM1.44 billion from RM2.73 billion. Year-to-date dividends totals five sen versus 12.5 sen previously.

On a quarterly terms and helped by a "gradual recovery in both volume and margin," 3QFY09 net profit of RM34.62 million came after a net loss of RM12.68 million in the preceding second quarter while revenue rose 15 % from RM488.4 million.

"Although the worst in the current economy downturn appears to be over, concerns over the sustainability of the recovery still remain," the company said.

SSteel added that speedy disbursement of funds under Malaysia's stimulus packages was crucial to sustain the local construction sector and demand for steel products. Looking ahead, the company said it expected to maintain its performance in the fourth quarter of the current financial year.