BAOTOU, Apr. 16 -- Baotou Steel announced 2008 annual report today.
The report shows the company produced 9.536 million mt of pig iron, 9.82 million mt of crude steel, 9.237 million mt of semi steel products, and exported steel products of 787kt during 2008. The company realized the sales revenue of RMB 44.124 billion, up 64.81% YoY, due mainly to the large growth rate for the selling price of steel products in domestic market during 1H 2008. However, the company suffered losses of RMB 334 million during 4Q 2008, and achieved net profit of RMB 920 million during 2008, down 47.30% YoY. The net assets per share and earnings per share were RMB 2.23 and RMB 0.14, respectively; the company plans to distribute RMB 0.5 in cash every 10 shares.
The company believes the sharp decline in net profit was an result of several reasons: as the raw materials prices increased in 1H2008, so the sales and production also increased, leading to more purchase volumes of iron ore concentrates and coke and other raw materials and significant increases in the purchase costs, so the production cost during 2008 rose as well. In particular, the prices of steel products plunged during 2H 2008 amid international financial crisis, and the market demand shrank, leading to increases in the finished steel inventories in the company, with the steel prices down nearly 100%.
The inventory of the company increased by 32.05% in 2008 compared to the end of 2007, up RMB 2.733 billion, and the losses for devaluation of inventory reached RMB 761 million, due mainly to the plunged prices of raw materials, the declines in sales during 2H and the increases in the finished steel inventory at the end of 2008.
In 2009, the company plans to produce 9.65 million mt of pig iron, 10 million mt of steel, and 9.35 million mt of semi steel products, and will strive to realize the sales revenue of RMB 43 billion, not lower than 2008`s level.
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