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CSC Scores Higher Revenue in Q1, 2014

2014/04/23 | By Steve Chuang

China Steel Corp. (CSC), the largest steelmaker in Taiwan by size, finished Q1, 2014 with consolidated revenue of NT$92.415 billion (US$3.805 billion), up 4.47% year-on-year (YoY), according to the firm's latest financial report.

For the quarter, CSC scored pretax profits of NT$5.073 billion (US$169.1 million), or NT$0.32 per share, down 1.9% quarter-on-quarter or 10.7% from NT$5.679 billion (US$1.893 million) a year ago.

Despite the decline, mainly resulting from the firm's price adjustments for higher-margin steel products such as wire rods and steel sheets that failed to keep pace with market recovery, institutional investors are still upbeat that the steelmaker has reported single-quarter pretax profits of NT$5 billion or more for five quarters in a row.

In March alone, the report shows, CSC raked in NT$31.543 billion (US$1.051 billion) in consolidated revenue for a 10% growth compared to February, with pretax profits of NT$2.064 billion (US$68.8 million), or NT$0.13 per share, sharply up 37% month-on-month. The firm's sales volume also increased 12.2% from 746,000 tonnes to 837,000 tonnes in the month, when its nominal prices of domestically sold steels were 1.2% higher on average than those for January-February.

Among CSC's products with higher prices for March, hot-rolled steel was NT$450 (US$15) more expensive per tonne than January-February, while prices of cold-rolled steel and galvanized steel coils were NT$360 (US$12) and NT$500 (US$18.8), respectively, higher as well.

As for the second quarter, CSC is quite optimistic, partly because international steel prices remain on an uptrend, particularly those in the U.S., where prices of hot-rolled steel and cold-rolled steel have steadily increased, to US$710 and US$800 per tonne during the second week of April.

Another factor driving CSC's optimism is that international prices of iron ore are expected to drop in the quarter, which will help to sustain the firm's overall performance for the first half of this year. (SC)