China Steel Corp (CSC, 中鋼), the nation’s only integrated steelmaker, yesterday said it had swung into profit in the first two months of the year from last year, owing to lower raw material prices and its effort to cut costs.
China Steel said in a statement its consolidated pretax profit was NT$2.92 billion (US$98.42 million) during the January-February period.
That was compared with a pretax loss of NT$1.31 billion the Greater Kaohsiung-based company reported for the same period last year, the company’s financial statement showed.
However, consolidated revenue fell 4.59 percent to NT$57.22 billion in the first two months, from NT$59.97 billion a year ago, according to a company filing to the Taiwan Stock Exchange.
CSC vice president Lin Chung-yi (林中義) said by telephone that the revenue decline in first two months was due to lower steel prices.
The company was able to make a profit because raw material prices were also lower than during the same two-month period last year, he said.
China Steel has increased its domestic steel prices for this month’s deliveries by 3.08 percent on average and 3.81 percent higher on prices for contracts in the next two months to reflect the stronger market sentiment.
Because about 64 percent of the company’s revenue comes from its domestic sales, the company’s outlook for this quarter will likely be better than last quarter, Lin said.
The company said it expected total orders for this quarter to be 10 percent higher than last quarter and that orders would increase at least 3 percent sequentially next quarter on the back of rising global steel demand, especially in China and the US, pushing it into the black
China Steel lost NT$380 million in the first quarter last year.
Meanwhile, the company initiated a plan last year to cut its costs, Lin said.
After lowering total costs by NT$6 billion last year, the company aims to cut costs by another NT$4 billion this year, he added.
CSC’s shares rose 0.56 percent to NT$27.15 yesterday, outperforming the TAIEX, which was down 0.31 percent.