China Steel, the only state-owned Chinese steel company, said its earnings were down 32 percent excluding taxes last month. In addition, the company may lose another US $ 13.28 million due to the litigation of its subsidiary.
China Steel, which owns 43.36 percent of the Taiwanese company Kaohsiung Rapid Transit Corp., is likely to suffer losses of T $ 400 million if Kaohsiung loses a lawsuit against its subcontractor regarding liability for subsidence in the Greater Kaohsiung District. Vice President of China Steel Steve Lee announced this by phone.
Kaohsiung Rapid Transit Corp's pre-tax profit was NT $ 1,180 million last month, up from NT $ 1,740 million a month earlier. At the same time, the company does not announce similar indicators of the last year.
According to preliminary information, the decrease in the company's profit in the fourth quarter to 5.17 billion Taiwanese dollars, which is 11.32 percent less compared to the third quarter, could be influenced by information about the preparation for a possible payment of large compensation.
However, the quarterly figure was NT $ 2.78 billion, up 85.97 percent from the same period a year ago.
"Despite the fact that steel prices last year were lower than the year before, we were able to reduce our raw material costs and create higher margins," said Steve Lee.
Last year, the company announced that its pre-tax profit was T $ 23.21, more than double the 7.65 billion year-ago figure.
Li also noted that the outlook for the current quarter is more positive than three months ago. The company expects a gradual increase in shipments in the current quarter, which will grow by 3 percent to 297.21 tons compared to 288.55 thousand tons, which were sold a quarter ago.
However, Li said that the market's prospects are unknown and therefore it is difficult to predict its mood in the long term, and in particular after the end of the first quarter. At the same time, the value of China Steel shares remained at the same level and amounted to 26.7 Taiwan dollars per share.
