Angang blames 17.5pc profit drop on export-tax rebate reduction
Angang Steel, the Hong Kong- and Shenzhen-listed arm of the mainland's No3 steelmaker, said third-quarter profit fell 17.5 per cent after Beijing cut export-tax rebates.
Profit dropped to 1.76 billion yuan from a revised 2.14 billion yuan in the same quarter last year on a higher tax charge after value-added tax rebates on exports of some steel products were cut on April 15 and June 1.
Angang, which sells about a fifth of its products overseas, paid 252 million yuan valued-added tax and other surcharges in the third quarter, up 136 per cent from 107 million yuan a year ago.
Turnover rose 12.9 per cent to 16.39 billion yuan on sales of more steel products.
Distribution charges nearly doubled to 418 million yuan because of higher freight costs. As a result, operating profit margin shrank to 14.7 per cent from 21.3 per cent.
For the first nine months, Angang reported a 25 per cent rise in net profit to 6.57 billion yuan from 5.25 billion yuan a year ago. Sales also increased 25 per cent to 49.43 billion yuan.
Angang's Hong Kong-traded H shares ended yesterday down 3.2 per cent at HK$30, but its Shenzhen-traded A shares closed up 0.2 per cent at 32.6 yuan before the results announcement.
Meanwhile, Tangshan Iron & Steel, the Shenzhen-listed unit of the mainland's No2 steelmaker, said third-quarter profit gained 18.8 per cent to 550.4 million yuan from a revised 463.2 million yuan on increased output of higher-grade products.
As the Hebei-based Tangshan Steel sells mainly to the domestic market, it did not carry a big increase in expenses on valued-added tax and surcharges. However, its distribution costs jumped 73 per cent.
Tangshan's profit for the first nine months rose 46.3 per cent to 1.71 billion yuan on a turnover of 30.3 billion yuan.
Tangshan Steel's shares fell 2.3 per cent, closing at 20.91 yuan.