Posted on 26 Oct 2007
Despite declining earnings posted by Pohang Steel Co. (POSCO), South Korea`s largest steelmaker, the Taiwan-based China Steel Corporation (CSC) is expected to see a 50% growth in year-on-year pretax revenues in the first three quarters of this year.
A market analyst attributed the declining earnings posted by POSCO to its concentration on stainless steel, which has seen slumping prices in the third quarter of this year. As CSC doesn`t focus on the production of stainless steel, the market analyst anticipated CSC`s profitability won`t be adversely affected for the rest of this year.
Because of the impact from the declining prices of stainless steel, POSCO posted a 1.2% year-on-year slump in net profits in the third quarter of this year.
An industry insider said CSC would see flat performance in profitability in the third quarter of this year, compared to that of the preceding one, because it won`t produce stainless steel like POSCO. But CSC`s third-quarter operations will be modestly impacted by the increase in maritime freightage.
The company`s internal audits showed that CSC posted NT$41.936 billion (US$1.29 billion) in pretax earnings, or NT$3.64 (US$0.112) in earnings per share, in the first eight months of this year, up 58.4% year-on-year.
CSC registered NT$15.086 billion (US$464.18 million) in earnings in July and August, equivalent to that posted in April and May. Based on the July and August earnings, CSC won`t see sharp decline in earnings in the third quarter of this year. In addition, the fourth quarter of a year is traditionally a booming season for the sale of steel products. An institutional investor estimated CSC will see pretax earnings reach NT$62 billion (US$1.9 billion) this year, up 30% year-on-year.
Besides CSC, other leading manufacturers of steel, including Tung Ho Steel Enterprise Corp. Feng Hsin Iron & Steel Co., also posted promising earning performance in the first three quarters of this year.
Tung Ho said it registered NT$4.235 billion (US$130.3 million) in pretax earnings, or NT$4.52 (US$0.14) in earnings per share, in the first three quarters of this year, up 29% year-on-year. Feng Hsin scored NT$2.676 billion (US$82.33 million) in pretax earnings, or NT$4.72 (US$0.14), in the first three quarters of this year, up 1% from the corresponding period of the previous year.
