China Steel Corp (CSC, 中鋼) yesterday announced that it would launch a share buyback program for the first time in 15 years to safeguard the interests of shareholders. The stock has dropped 18.62 percent this year.
In a statement posted on its Web site, the nation’s largest steelmaker said its board of directors has agreed to buy back up to 150 million shares, or 0.95 percent of total outstanding shares, at NT$16.98 to NT$37.26 per share.
The company is expected to spend NT$137.92 billion (US$4.27 billion) on the buyback plan and would distribute the repurchased shares to its employees, the statement said.
Photo: CNA
“In the past two or three years, the world has been affected by the COVID-19 pandemic, the Russia-Ukraine war and China’s strict pandemic controls, which have impacted global economic development, suppressed market momentum, caused equity fluctuations and affected steel demand,” the company said.
“The company’s stock price has been affected recently by the global political and economic situation and the weaker-than-
expected recovery of steel demand,” it said, adding that investors have overreacted to expectations of an economic downturn.
It is CSC’s first share repurchase plan since the 2008 global financial crisis, as the company aims to demonstrate its confidence in the steel market and its determination to safeguard the interests of shareholders, while motivating employees.
The buyback scheme, which is to start on Monday and run through Jan. 5 next year, would not be a financial burden for the Kaohsiung-based company, as the maximum amount needed to repurchase its shares would account for only 2.74 percent of the company’s current assets, China Steel said.
The stock closed 1.24 percent higher at NT$24.55 yesterday before the company unveiled its buyback plan and the latest financial data.
CSC posted losses per share of NT$0.05 in the third quarter, compared with earnings per share of NT$0.06 in the second quarter and NT$0.12 a year earlier, according to its filing with the Taiwan Stock Exchange yesterday.
In the first three quarters of the year, it posted losses per share of NT$0.03, versus earnings per share of NT$1.48 in the same period last year. Cumulative revenue over the period fell 22.38 percent to NT$274.93 billion from NT$354.19 billion a year earlier.
The board yesterday also approved a plan to invest NT$600 million to install neon production equipment, the company said, adding that neon is a key raw material for gas lasers in wafer processing and plays an important role in the semiconductor industry.
The company said the investment aims to bolster domestic supply of strategic semiconductor materials to enhance supply chain resiliency.
It is also part of the company’s efforts to diversify into other businesses for stable income in the long term, it said.
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