Lingyuan Iron and Steel Co., Ltd, a state-owned company principally engaged in the smelting and rolling processing of ferrous metals, expected its net profit to drop sharply by 60.05% year on year in the first half of 2020, it said in a statement on July 9.
The decrease was forecast to be between 152 million to 228 million yuan during the period.
The net profit deducting non-recurring losses and gains was forecast to be 235-151 million yuan, marking a year-on-year slump of 60.75%.
Lingyuan Iron and Steel has stepped up efforts to lower negative impact of coronavirus through cutting cost, but quicker price drops of steel prices caused falls in steel production and sales compared with a year ago, and finally caused lower earnings.
In the first half year, the company's finished steel price dropped 6.84% year on year, which was 4.10 percentage points higher than decline in cost. Its finished steel output and sales dropped 4.38% and 6.63% during the same period.
The company's fate was closely related with bad performance in the whole sector. In January-May, China's steel industry realized 49.33 billion yuan of total profit, plunging 57.2% on the year. In May, the profit declined 50.5% to 18.7 billion yuan.
The firm has 5.06 million tonnes per annum (Mtpa) of pig iron production capacity, 5.70 Mtpa of crude steel capacity and 7.01 Mtpa of finished steel capacity.
(Writing by Tammy Yang Editing by Jessie Jia)
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