China Steel Corp (中鋼), the nation’s biggest steelmaker, yesterday posted a 549 percent year-on-year surge in pre-tax net profit on a consolidated basis for the first quarter, buoyed by higher product prices.
Pre-tax profit skyrocketed to NT$5.39 billion (US$178.76 million) in the quarter, compared with NT$830.94 million in the same period last year, according to a company statement.
On an annual basis, last quarter’s sales soared 27.75 percent from NT$64.96 billion to NT$82.98 billion, with operating income up 585 percent from NT$939.5 million to NT$6.43 billion, company statistics showed.
“Soaring international steel demand enabled China Steel to raise prices, which offset higher material costs,” executive vice president Wang Shyi-chin (王錫欽) said by telephone yesterday.
The Kaohsiung-based company boosted its domestic product prices by 6.9 percent for products to be shipped this quarter, after it raised prices by 12.6 percent for first-quarter deliveries.
Asked about the latest price adjustment, the company said it has seen a downward trend in global steel prices since the beginning of this month.
The price of iron ore has dropped 30 percent since the end of last month and reached a six-month low of about US$61 per tonne last week, market data showed.
“We will definitely keep watching the trend of global [material] prices before lifting prices further,” Wang said, declining to give a forecast on product prices.
The nation’s only integrated steelmaker is to announce its price adjustments for third-quarter shipments by the end of next month.
Commenting on sales volume, Wang said that the company expects to deliver nearly 3 million tonnes of steel products this quarter.
Shipments totaled 2.7 tonnes in the January-to-March period, company data showed.
The company saw its net profit soar 110.9 percent year-on-year to NT$16.04 billion for the whole of last year, while revenue rose 2.8 percent to NT$285.05 billion.
Gross margin also improved from 7.51 percent to 13.55 percent, company data showed.
Based on last year’s earnings, the board proposed paying a NT$1.4 cash dividend for each preferred share and a NT$0.85 cash dividend for each common share, a company statement said.
China Steel shares climbed 2.06 percent to close at NT$24.8 in Taipei yesterday, before the earnings announcement.
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