China Steel Corp (中鋼), the nation’s biggest steelmaker, yesterday said its third-quarter pretax profit grew 13-fold to NT$11.05 billion (US$340 million) from NT$774.34 million in the second quarter amid improving market conditions.
But the third-quarter figure was still 28 percent less than the NT$15.35 billion the company posted a year earlier.
Revenue rose 14.7 percent to NT$42.07 billion in the third quarter from NT$36.67 billion in the second quarter, but was down 45.3 percent from NT$76.89 billion a year ago.
Production volume was 2.08 million tonnes in the third quarter, up from 1.94 million tonnes in the second quarter, while sales volume totaled 2.19 million tonnes in the third quarter, compared with 1.99 million tonnes in the previous quarter, the Kaohsiung-based company said in an e-mailed statement.
Shares of China Steel rose 0.17 percent to NT$29.85 yesterday after the company disclosed its quarterly numbers, compared with a decline of 1.61 percent on the benchmark TAIEX.
Commenting on its improving performance for the quarter, the company said: “Steel prices have hit the bottom and started rebounding since July.”
“In the meantime, raw material prices have dropped, allowing [us] to lower production costs,” it said.
Other favorable factors affecting the company’s third-quarter profit were declines in undelivered raw materials and inventories at China Steel, which helped the company cut sales costs by reversing a NT$1.24 billion loss on undelivered raw materials and a NT$9.92 billion loss on inventories previously recognized on its balance sheet.
China Steel posted a loss of NT$6.45 billion in the first half of the year as the market situation worsened. In response to falling steel demand, the company cut its production, closing the No.3 blast furnace from April through August for revamping and maintenance, and trimmed 10 percent off direct costs and 20 percent off indirect costs.
With prices still rising in the third quarter, the company’s pretax profit totaled NT$2.26 billion in the first nine months of the year, although that was still far behind the NT$48.52 billion it made in the same period of last year.
For the whole year, the company is expected to report profit of between NT$8 billion and NT$10 billion, analysts at Capital Securities Corp (群益證券) and Citigroup Investment Research said.
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