China Steel Corp (中鋼) expects its combined revenue to grow 15 percent this year to hit the highest level since 2011 as demand continues to expand, China Steel chairman Wong Chao-tung (翁朝棟) said yesterday.
“We are cautiously optimistic about this year’s business and expect whole-year revenue to reach NT$400 billion (US$13.2 billion),” Wong told an annual shareholders’ meeting in Kaohsiung, citing World Steel Association statistics that forecast global steel demand will grow by 1.8 percent this year.
In the first five months of the year, cumulative revenue totaled NT$160.33 billion, a 13.68 percent increase from NT$141.04 billion in the same period last year, the nation’s only integrated steelmaker said in a filing with the Taiwan Stock Exchange.
Wong told shareholders that the company would continue to scrutinize the looming trade war between the US and China, referring to an order issued under Section 232 of the US’ Trade Expansion Act to impose a 25 percent tariff on imported steel.
The order would have an effect on China Steel, compared with a US investigation into Chinese technology transfer and intellectual property practices under Section 301 of the Trade Act of 1974, he said, adding that Taipei is still seeking an exemption from the US’ proposed tariffs.
Despite the uncertainty facing the local steelmaking industry, the effects of the proposed tariffs on the company’s revenue would be “very limited” this year, the company said.
China Steel only sells thousands of tonnes of steel products to US customers, or less than 1 percent of its total sales volume, it said.
Shareholders yesterday approved the board’s proposal to distribute a cash dividend of NT$0.88 per share, based on last year’s net profit of NT$16.91 billion, or earnings per share of NT$1.09.
Net profit grew 5.4 percent from NT$16.04 billion in 2016, due partly to profit generated by subsidiaries — including China Steel Corp India Pvt Ltd (中鋼印度), Dragon Steel Corp (中龍鋼鐵) and Chung Hung Steel Corp (中鴻鋼鐵) — China Steel said in its annual report.
Combined revenue last year increased 18 percent from NT$293.06 billion to NT$347.01 billion, it said.
However, gross margin over the period fell from 13.55 percent in 2016 to 11.34 percent, as the firm’s product prices for domestic deliveries did not fully reflect rising material costs, the company said.
The government-backed steelmaker sold 10.85 million tonnes of steel products last year, company data showed.
The cash dividend translated into a dividend yield of 3.72 percent based on the company’s closing price of NT$23.65 yesterday.