Beijing Shougang Co., Ltd., a Chinese listed steel manufacturer, is expected to realize 470-520 million yuan of net profit in the first half this year, slumping 48.1%-53.09% year on year, said the company in a forecast report released recently.
Earnings per share are predicted to be 0.089-0.098 yuan or so. During the same period last year, the company earned 1 billion yuan of net profit with earnings per share of 0.189 yuan.
Beijing Shougang stated that, since the outbreak of COVID-19, the steel price dropped noticeably on a year-on-year basis, as the prices of raw materials like iron ore remained high but sluggish economy dampened demand for steel products.
Confronted this situation, the company committed to stabilize the production and streamline the products structure to control the cost. Effort to combat the COVID-19 can't fully offset drawbacks brought by weaker supply-demand fundamentals.
According to the company's first-quarter report, the company yielded 199 million yuan of net profit. The second-quarter net profit was calculated higher at 270-320 million yuan.
Entering May, as China speeded up its back-to-work process, the steel market embraced strong demand. The steel price increased sharply as a result, leading to a turnaround in steel industry.
The data from the National Bureau of Statistics showed that enterprise above designated size gained net profit of 49.3 billion yuan in the year to May, heading down 57.2% year on year.
Shougang Group focuses its business mainly on steel industry and also runs mining, machinery, electronics, building and related services, in addition, they also developed business with overseas companies.
To implement the scientific outlook on development and based on the overall development status of China's iron and steel industry, the China's National Development and Reform Commission approved the plan of moving Shougang to Caofeidian, Tangshan, in February 2005. In 2010, Shougang completed its relocation. In July 2019, the Fortune Global 500 list ranked it 402nd.
(Writing by Rebecca Liu Editing by Tammy Yang)
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