Maanshan Iron and Steel Co., Ltd. (600808) unveiled a RMB 3.047 bln net profit for the first three quarters of 2008 and a 47.4% decline in EPS to RMB 0.1164 for 3Q '08, when the net profit was RMB 786 mln.

During the reporting term, global financial market turmoil and the devastating subprime crisis have slowed international economic growth. Steel prices bounced back with slackening international demand. Sluggish fixed-asset investment growth and weakening domestic demand dragged down steel prices and slashed corporate profits dramatically. Counter-measures have been adopted to mitigate risk stemming from volatile prices. The company stated that consequently, production and operations turned in relatively good performances thanks to the adjusted production and sales strategies.

During the third quarter, the company produced a total of 3.75 mln tons of pig iron, 4.08 mln tons of raw steel and 3.81 mln tons of finished steel, up 5.63%, 4.08% and 4.67% YOY respectively. Consequently, revenue climbed 44.68% to RMB 19.871 bln and net profit was surged by 56.46% to RMB 787 mln.

Zhou Tao, an industry analyst from Sinolink Securities, said it was normal for steel firms to experience diminished performance amid a sharp drop in domestic steel prices, as seen in the three months since July. Falling prices have been whittling profits further since September and the fourth quarter is likely to show worse-than-expected performance.


Source: China Securities News

Date: 15 Oct 2008

CN01/FL/JL/NK/MM