Angang Steel expects to post $832m Q3 profit
Updated: 2009-08-19 07:18
(HK Edition)
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HONG KONG: Angang Steel Co, the second-largest steelmaker by value on the mainland, will post a third-quarter profit, recovering from a loss in the prior period as government spending on infrastructure revives demand.
Profit may be as much as 5.69 billion yuan ($832 million) for the three months ending September, based on a nine-month earnings forecast provided by the Liaoning province-based company last night.
For the first six months, the mill posted a loss of 1.56 billion yuan, smaller than it had forecast.
The steelmaker also recorded a drop of 24.69 percent in sales for the first half of 2009, to 30 billion yuan, in contrast to net profits of 6 billion yuan in the same period last year. As exports and inland demand for steel slipped sharply, revenue from exports for the first six months dropped 87 percent to 770 million yuan.
The country's monthly steel output has set new records for the three months since May and prices have soared 28 percent since the government announced 4 trillion yuan of spending in November to revive the economy. Record passenger car sales and a surge in construction have spurred demand.
"We remain positive about the fourth-quarter demand and expect well-supported steel prices," Trina Chen, a Hong Kong-based analyst at Credit Suisse Group AG, wrote in a note yesterday.
Angang rose 1.7 percent to close at 14.13 yuan in Shenzhen, outperforming the 1.4 percent gain on the benchmark Shanghai Composite Index. The shares rose 2.6 percent to HK$15.66 in Hong Kong.
The steelmaker boosted crude-steel production by 11 percent to 9.1 million metric tons in the first six months from a year earlier, the company said. It had forecast a loss of as much as 2.99 billion yuan for the first half.
Angang estimated it would post earnings between zero and 4.13 billion yuan for the first nine months of the year, compared with 8.25 billion yuan a year ago, according to the statement.
The company posted a loss of 1.55 billion yuan for the first half of this year under international standards.
China Daily - Bloomberg News
(HK Edition 08/19/2009 page4)