It is reported that Hunan Valin Steel obtained a government subsidy of CNY 1.17 billion.

The steelmaker was the worst performer among listed companies in 2010, incurring a loss of CNY 2.6 billion. It was struggling to return to profit in 2011. Valin Steel posted a loss of CNY 215 million in the first quarter of 2011 and the loss narrowed to CNY 2.67 million in the second quarter. It earned a profit of CNY 25.21 million in the third quarter on revenue of CNY 18.7 billion.

For the first three quarters, the steelmaker recorded a cumulative net loss of CNY 174 million. The steelmaker said it hopes to either reduce losses or post a small profit for full year 2011. Valin Steel said business conditions worsened in the fourth quarter due to significant drops in steel prices making it more difficult to return to profit.

The steelmaker said it may be given a delisting warning as it may incur losses for two years in a row.

Mr Yang Xianghong board secretary said Valin Steel sold an old office building for CNY 49.26 million to a major shareholder in December, generating investment returns of CNY 30 million.

The steelmaker announced in December cost cutting measures of CNY 200 million. During the first 10 months, the steelmaker recorded CNY 580 million of foreign currency gains.

Mr Wang Zhaohua an analyst at Sinolink Securities said the company could generate returns of CNY 313 million should it change the way it calculates depreciation.

(Sourced from stcn.com)