CSC to See Pretax Earnings Hit N40 Billion in 2006

Taipei, July 31, 2006 (CENS)--As the steel market usually sees peak demand in the fourth quarter of a year, China Steel Corporation (CSC), Taiwan's largest integrated producer of steel products, is anticipated to see pretax earnings reach NT$40 billion (US$1.23 billion at US$1:NT$32.5) this year.

CSC registered NT$4.436 billion (US$136.49 million) in pretax earnings in June, or NT$0.4 (US$0.012) in earnings per share (EPS), up 44.45% from May and hitting the highest monthly record since the fourth quarter of last year.

The company posted NT$16.486 billion (US$507.26 million) in cumulative pretax earnings, or NT$1.5 (US$0.046) in EPS, in the first half of this year.

An institutional investor predicted CSC would see handsome earnings in the third quarter of this year as it has recently largely raised the selling prices by an average of 10% for such major product lines as hot- and cold-rolled steel coils, and steel bars for delivery in the third quarter.

CSC said it sold 869,000 metric tons of steel products in June, about 10,000 metric tons less than that posted in the preceding month. The company posted NT$14.884 billion (US$457.96 million) in sales in June, up 4.74% from NT$14.21 billion (US$437.23 million) in May.

Although CSC didn't enjoy outstanding performance in the profitability of core business in the second quarter of this year, it posted handsome profits from such subsidiaries as Chung Hung Steel Corporation and Dragon Steel Corporation.

CSC noted its subsidiaries contributed profits of NT$2.716 billion (US$83.56 million) in the second quarter of this year, up 50% from NT$1.888 billion (US$58.09 million) posted in the first quarter.

The company saw quarterly pretax earnings reach NT$9.987 billion (US$307.29 million) in the second quarter of this year, representing a whopping growth of 53% from the first quarter. It is expected the company would be able to post earnings growth of 30% up to 50% sequentially in the third quarter.

Based on the earnings level posted in June, CSC is expected to see quarterly earnings reach over NT$3.5 billion (US$107.69 million) in the third quarter.