CSC predicted to garner NT$42 billion in pre-tax earning next year

Dec 22, 2003 Ι Industry In-Focus Ι General Items Ι By Ben, CENS
facebook twitter google+ Pin It plurk

Taipei, Dec. 22, 2003 (CENS)--At a recent board meeting, China Steel Corporation (CSC), Taiwan's largest steel manufacturer, predicted it would post NT$42 billion (US$1.23 billion) in pretax earnings next year, down 6.7% from this year's anticipated NT$45 billion (US$1.32 billion).

Based on the financial projection, CSC predicted it would garner NT$4.44 (US$0.13) and NT$3.37 (US$0.09) in pretax and after-tax earnings per share, respectively, next year.

CSC attributed the earnings decline to its scheduled revamp of hot-rolling and steel billet production facilities next year. Moreover, the short supply of such raw materials as coal, iron and scrap steel in the international marketplace as well as the rise in freight fees will make the company see sales drop and production costs rise.

Because of the proceeding of revamping production facilities, CSC anticipated it would see sales of steel amount to 10 million metric tons next year, down 340,000 metric tons from this year's level.

But the company seems to hold a conservative attitude toward next year's financial projection because it would see the selling price of its products increase next year in light of the cost-push factor resulting from rise in material prices.

Despite the expected decline in sales amount, CSC will enjoy increased sales value because of the rise in the selling prices of steel products next year. The company said it would garner NT$128.9 billion (US$3.79 billion) in sales next year, up NT$300 million (US$8.82 million) from this year's NT$128.6 billion (US$3.78 billion).

Despite the rise in sales value, the company will see operating costs increase next year because of the rise in freight fees and raw materials. The company expected it would have to spend NT$84.9 billion (US$2.49 billion) in operating costs next year, up NT$2.3 billion (US$67.64 million) from this year's NT$82.6 billion (US$2.42 billion).

CSC will also see a decline in returns on reinvestments because of the increased operating costs of its invested firm--Yieh Loong Steel Corp. The company predicted it would post NT$4.3 billion (US$126.47 million) in returns on reinvestments next year, down NT$1.3 billion (US$38.23 million) from this year's NT$5.6 billion (US$164.7 million).
©1995-2006 Copyright China Economic News Service All Rights Reserved.