China Steel Corp (CSC, 中鋼) yesterday posted its first monthly pre-tax profit in three months for last month, thanks to improved demand and reduced production costs.
The company said its efforts to boost orders bore fruit last month as reflected in a climbing equipment loading rate, which went as high as 100 percent for some production lines in the current quarter, up from an average of 85 percent last quarter.
“An increase in orders last month gave a boost to equipment utilization and drove down unit costs. This is the main factor [for the turnaround],” CSC executive vice president Wang Shy-chin (王錫欽) said. “Lower prices for raw materials, like iron ore and coal, also helped.”
Wang expects CSC operations to improve further this month, on the back of rising demand and prices. The company raised prices by 2.3 percent, or NT$307, per tonne on average for steel products to be delivered this month to domestic clients.
Last month, CSC swung into pre-tax profit of NT$250 million (US$7.61 million), compared with a pre-tax loss of NT$318 million in January.
The company also returned to an operating profit of NT$270 million, marking the first operating profit since September last year, during which the company posted NT$6 million in operating losses.
Shipments of carbon steel dropped 12 percent to 786,717 tonnes, from 894,669 tonnes in the previous month.
To prop up income, CSC sold shares in Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) over the past few months.
The steelmaker gained NT$635 million by selling 5.34 million TSMC shares in the final quarter of last year, a company filing with the Taiwan Stock Exchange said.
After the sale, CSC still owns a 0.03 percent stake in TSMC, or about 7.69 million shares, as of Dec. 14 last year.
Shares of CSC have soared about 23 percent to NT$22.15 yesterday since the beginning of this year, outperforming the TAIEX, which has rallied nearly 5 percent during the same period, stock exchange data showed.
