Q2 profit rises as Baosteel sells units
Source: Bloomberg News |
August 28, 2012, Tuesday
|
Print Edition
Print Edition
BAOSHAN Iron and Steel Co, China's biggest publicly traded steelmaker, posted a fourfold increase in second-quarter profit after selling two unprofitable units. Nine-month profit may rise more than 50 percent, it said.
Net income surged to 8.39 billion yuan (US$1.32 billion) in the quarter ended on June 30 from 2 billion yuan a year earlier, based on first-half earnings reported yesterday in Shanghai.
Baosteel completed the sale of its stainless-steel and specialty-steel units to its parent for 42.6 billion yuan on April 1. The Shanghai-based company, which supplies half of China's automobile steel, is facing shrinking margins as the European debt crisis and domestic property curbs sap steel demand and prices.
"We aren't optimistic about the outlook for the third quarter as Baoshan has been cutting prices drastically," Sarah Wang, an analyst with Masterlink Securities Corp in Shanghai, said before the earnings release. "Demand from end users such as automakers, machinery and shipbuilders is stagnant."
Operating profit at Baosteel shrank an annual 60 percent to 2.72 billion yuan in the first half as weakening steel demand weighed on prices, it said. Baosteel reported a pretax profit of 9.09 billion yuan by selling the units.
First-half profit rose 89 percent year on year to 9.61 billion yuan, Baosteel said.
Net income surged to 8.39 billion yuan (US$1.32 billion) in the quarter ended on June 30 from 2 billion yuan a year earlier, based on first-half earnings reported yesterday in Shanghai.
Baosteel completed the sale of its stainless-steel and specialty-steel units to its parent for 42.6 billion yuan on April 1. The Shanghai-based company, which supplies half of China's automobile steel, is facing shrinking margins as the European debt crisis and domestic property curbs sap steel demand and prices.
"We aren't optimistic about the outlook for the third quarter as Baoshan has been cutting prices drastically," Sarah Wang, an analyst with Masterlink Securities Corp in Shanghai, said before the earnings release. "Demand from end users such as automakers, machinery and shipbuilders is stagnant."
Operating profit at Baosteel shrank an annual 60 percent to 2.72 billion yuan in the first half as weakening steel demand weighed on prices, it said. Baosteel reported a pretax profit of 9.09 billion yuan by selling the units.
First-half profit rose 89 percent year on year to 9.61 billion yuan, Baosteel said.
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