Angang posts interim profit down 22pc due to income tax levy
Newly-listed Angang New Steel posted a 22 per cent drop in interim profit to 232 million yuan (about HK$215.52 million), hurt by a levy on income tax.
It paid no income tax during the same period last year, as it remained part of Anshan Iron and Steel Corp.
The interim figure was 48.3 per cent of the H share's full-year forecast of 480 million yuan.
Before income tax, Angang's operating profit soared 18.9 per cent, underpinned by an increase in gross margin to 14.2 per cent in the first half from 13.59 per cent last year.
Turnover rose 4.6 per cent to 3.16 billion yuan.
In the first half, the company's weighted average product price was largely stable at 2,778 yuan a tonne, as a slight price increase in thick plates was offset by a small drop in price of cold-rolled sheets and wire rods.
Angang expects steel product prices will remain stable in the second half.
The price of its key raw materials also posted a slight drop.
Deputy general manager Fu Jihui said Angang would be able to maintain its gross margin of about 14 per cent in the second half and its profit projection.
Angang, in which China Everbright Holdings owns a 7.5 per cent stake, was listed in Hong Kong last month by hiving off three of its parent's most profitable operations.
Mr Fu said that as the mainland's state sector was undergoing a massive restructure, which was encouraged by the upcoming 15th Party Congress this month, Angang would not rule out the possibility of acquiring 'quality assets' related to its steel manufacturing operation in the long term.
'However, we don't have any asset acquisition plan in the short-term as we will focus on the expansion stipulated in the prospectus,' he said.
