Hupsteel, the provider of steel products and services for the oil and gas, chemical and marine industries, has posted a profit after tax of $1.2 million for the quarter ended 31 March 2010 (3QFY10) compared to a loss of $2 million in 3QFY09. Revenue for the quarter stood at $39.8 million down from $50 million in 3QFY09.

Hupsteel says revenue for the quarter declined slightly due to slower sales as a result of the Chinese New Year holidays and customers were also cautious in launching projects and waiting for clearer signals of a sustained recovery in the economy.

Compared to a year ago, steel prices remain soft but Hupsteel was able to position itself to take advantage of the reduced steel prices to improve its gross profit margin for the quarter (13.0% 3QFY10 vs. 4.1% 3QFY09) and for the 9 months (16.2% 9MFY10 vs. 13.2% 9MFY09).

At the end of 31 March 2010, the group has a healthy cash holding of $70.5 million.

Hupsteel says the sectors that the group serves like marine and oil & gas have yet shown any spike in activities although the economy has registered higher than expected growth. The company says it is hopeful that the economic recovery may eventually point to an increase in demand for steel products. In addition, rising steel prices will likely induce customers to jumpstart their purchase programme so that they will not be faced with higher material costs later.