China Steel Corp (中鋼), the nation’s largest and only integrated steel maker, said yesterday its profit dropped by 53.1 percent last year from 2007, leading the company to propose the lowest payout to shareholders in seven years, or NT$1.73 in dividends.
After-tax profit totaled NT$24.03 billion (US$709 million) last year, or earnings per share of NT$2.03, the Kaohsiung-based company said in a statement. After-tax profit in 2007 was NT$51.26 billion, or NT$4.49 in earnings per share, the company’s previous financial reports showed.
But the company’s revenue was up, totaling NT$256.36 billion last year, compared with NT$207.92 billion the previous year.
China Steel said the dividend payout would include NT$1.3 in cash per share and 4.3 percent in stock based on last years earnings.
The company paid shareholders a cash dividend of NT$3.50 per share and a stock dividend of 3 percent last year.
The proposed dividend payout must be approved by shareholders at a meeting on June 19.
The 53.1 percent decline in profit came as the company incurred a fourth-quarter loss of NT$15.45 billion amid the global economic slowdown.
The company made a profit of NT$39.48 billion in the first three quarters of last year.
During an investors conference on Feb. 10, China Steel blamed falling prices, inventory loss provisions and investment write-downs for lowering its pretax profit to NT$30.26 billion last year from NT$61.65 billion in profit the previous year.
At the time, the company said it had swung to a pre-tax loss of NT$18.26 billion in the fourth quarter, its first quarterly loss in more than three decades.
To help boost its working capital, the company’s board yesterday approved a proposal to issue NT$30 billion in corporate bonds with maturities between three and seven years at a yield no higher than 3 percent, as well as a plan to raise NT$5.37 billion by issuing 536.98 million new shares.
Shares of China Steel rose 1.05 percent to close at NT$24.1 on the Taiwan Stock Exchange, extending gains on reports that steel makers’ contract prices with coal producers could fall as much as 60 percent this year from last year, which could help China Steel save up to NT$30 billion this year.
SinoPac Securities Corp (永豐金證券) said in a client note yesterday that new feedstock prices would help steel companies lower quotes and likely help give downstream demand a shot in the arm.
The local brokerage maintains a “buy” rating on the stock of China Steel, with a target price of NT$27.9.
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