Sat, Aug 10, 2013 - Page 14 News List

China Steel’s pretax profit increases 17% from June

By Camaron Kao  /  Staff reporter

China Steel Corp (中鋼), the nation’s only integrated steelmaker, yesterday said pretax profit increased 17 percent to NT$1.83 billion (US$61.17 million) last month from June on a consolidated basis, thanks to no inventory losses booked in the month.

The company booked inventory losses in June after it lowered prices for its July and August domestic shipments, the company’s financial department vice president, Lin Chung-yi (林中義), said by telephone.

“We did not have such losses last month,” he said.

China Steel did not provide a year-earlier consolidated figure for comparison. However, Lin said the profit margin last month was higher than a year ago, because of lower raw material costs.

The company’s consolidated revenue reached NT$29.45 billion last month, up 14 percent month-on-month, but down 4.08 percent year-on-year, according to a filing to the Taiwan Stock Exchange.

In the first seven months of the year, cumulated revenue totaled NT$202.6 billion, down 8.45 percent from a year earlier, the filing showed.

Steve Lee (李慶超), another vice president at China Steel, said the outlook for this quarter is still mixed, in that sales volume is higher than expected, but steel prices are lower than a quarter ago.

China Steel sold 767,788 tonnes of steel last month, up 4.3 percent from 736,089 tonnes a month ago. The company is set to announce its steel prices for October and November contracts on Aug. 30.

With a more drastic decline in steel prices than in coal prices, SinoPac Securities Investment Service Co (永豐投顧) yesterday predicted that the company would raise prices by US$10 per tonne on average because steel companies around the world are still keeping their prices high and demand is likely to pick up in the fourth quarter.

The company is forecast to post revenue of NT$82.3 billion and profit of NT$2.47 billion this quarter, down 28 percent and 41 percent from a quarter ago respectively, SinoPac said in a note.

China Steel’s shares declined 1.2 percent to NT$24.7 yesterday, underperforming the TAIEX, which was down 0.65 percent.

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