China Steel Corp (CSC, 中鋼) yesterday said that it is cautious about the third quarter, as a sluggish global economy has dragged down market demand since the fourth quarter of last year amid a lingering US-China trade conflict.
However, the nation’s biggest steelmaker still has high hopes for the fourth quarter and believes that transferring orders would benefit the company due to growing demand for vehicle parts in the US, chairman Wong Chao-tung (翁朝棟) said at the company’s annual shareholders’ meeting in Kaohsiung.
Wong said that he is also confident about the fourth quarter due to more Taiwanese companies relocating back to Taiwan, in particular those specializing in routers and servers, which would drive up demand for laminated products.
“We hope the company will outperform the industry in the fourth quarter, as it is traditionally a high season for the industry,” Wong said, adding that an upcoming G20 summit might bring a resolution to the US-China trade dispute.
CSC reported net profit of NT$4.14 billion (US$132.06 million) for the first quarter, down 24.11 percent from NT$5.46 billion in the same period last year.
The decline in earnings was mainly due to rising raw material costs and higher tariffs, CSC president Lin Horng-nan (林弘男) said.
Cumulative revenue in the first five months of this year totaled NT$161.76 billion, a slight increase of 0.89 percent from a year earlier, company data showed.
Despite shareholders’ concerns over rising production costs, the company is striving to increase investment to up to 1 percent of revenue into research and development as it looks to integrate artificial intelligence technologies into its plants to improve manufacturing efficiency, Wong said.
The company said that it has developed automated overhead cranes, which would be installed within its plants to decrease staffing needs.
Shareholders approved a plan to distribute a cash dividend of NT$1 per share, representing a payout ratio of 63.29 percent based on last year’s earnings per share of NT$1.58.
Wong, who represents the Ministry of Economic Affairs, was also reappointed as chairman at a subsequent board of directors meeting.
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