October 08, 2008

CSC sees Q2 earnings surge by 30% QoQ

It is reported that China Steel Corporation will see a 30% quarterly increase in earnings in the second quarter of 2008. As CSC has raised the selling prices of its products slated for delivery in the second quarter, an industry insider believed the steel maker will see substantial growth in earnings in the second quarter.

Based on the projected quarterly shipments of between 2.5 million and 2.7 million tonnes of steel products, CSC is expected to see second quarter sales hit a historic high of over TWD 65 billion. Its quarterly pretax earnings will challenge TWD 18 billion in the second quarter.

CSC said that it had to offer a higher price to procure spot raw material in the first quarter of 2008 than in the first quarter, leading to a drop in gross profit margin. CSC saw monthly gross operating margin slip to 22.52% in the first quarter of 2008 from 23.4% in the fourth quarter of 2007.

CSC has registered TWD 20.427 billion in sales for April 2008 down by of TWD 20 million from March 2008 but still up by 24.74% YoY. It scored TWD 77.78 billion in cumulative sales in January to April 2008period, up by 18.74% YoY. It saw average selling price increased to TWD 24,400 per tonne in March 2008, up by 7% MoM from TWD 22,800 in March 2008.