UPDATE 1-Steel price slump drives Erdemir to Q1 net loss

Mon May 18, 2009 1:26pm EDT

Related Topics

* Posts Q1 net loss of 137 million lira

* Loss steeper than expected

* Sales fell 24 percent to 1.063 billion lira

ISTANBUL, May 18 (Reuters) - Erdemir (EREGL.IS), Turkey's biggest steelmaker, posted a first-quarter loss of 137 million lira ($88.5 million), after global steel prices fell to a six-year low and weaker currency made its foreign debt costlier.

The Eregli, Turkey-based company had a profit of 219 million lira in the same period last year. It had been expected to report a loss of 111 million lira in a Reuters poll.

Sales fell 24 percent to 1.063 billion lira, Erdemir said in an earnings statement to the Istanbul Stock Exchange after the market closed on Monday.

Worldwide steel prices have fallen to their lowest level since 2003 as demand slumps amid the global economic slowdown. Consumption could fall 15 percent this year, the World Steel Association has said.

The 9 percent decline in the lira against the dollar in the first quarter made it more expensive for Erdemir to service its foreign-denominated debt.

Shares in Erdemir closed up 1.0 percent at 4.20 lira on Monday, just outperforming the main index. The stock has gained 2 percent since the start of the year, while the main share index .XU100 has climbed about 22 percent.

Of the eight analysts who rate the stock, one rates Erdemir a "buy", one rates it a "hold", two rate it "underperform" and four rate it a "sell". (Additional reporting by Alexandra Hudson; Writing by Ayla Jean Yackley; Editing by Dan Lalor)

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