- In an earnings statement to the Shanghai Stock Exchange, Baoshan Iron & Steel (600019.SS) has posted a 142.89% increase in net profit for the first quarter of 2017 to RMB 3.79 billion; revenue increased 76.79% to RMB 85.01 billion.
- The company also recorded a 849.33% increase in net profit for 2016 to nearly RMB 9 billion and a 13.23% increase in revenue to RMB 185.46 billion.
- EPS was RMB 0.17 for the first quarter and RMB 0.55 for 2016.
- The company also announced a cash dividend of RMB 0.21 per share.
Why It Matters:
- The company explained that the increase in both net profit and revenue for 2016 and the first quarter of 2017 was primarily due to a recovery in the market, a successful reduction in costs, and a merger with Wuhan Iron and Steel Corporation which was completed in February 2017.
- In the first quarter, the gross margin of Baoshan Iron & Steel’s main business, iron and steel, was 16.28%, up 4.34 percentage points compared with the first quarter of 2016. Gross margin for 2016 was 16.8%, up 8 percentage points compared with the previous year.
- In 2016, the company successfully cut redundant productivity by 4.65 million metric tons. And due to a cut in redundant productivity across the industry, the iron price increased in 2016 and the gross margin for iron and steel businesses also increased.