SINGAPORE (Aug 8): Delong Holdings reported a 33.7% rise in 2Q17 earnings to RMB380.8 million ($77.3 million) from RMB 284.8 million a year ago.
In 2Q17, sales rose 25.8% to RMB2.6 billion from RMB2.1 billion a year ago due to a significant increase in average selling prices of hot rolled coil (HRC) coupled with an increase in sales volume of HRC driven by infrastructure and construction activities in China.
During the quarter, the group sold 1,130,200 tonnes of HRC and 33 tonnes of steel billets as compared to 1,038,809 tonnes of HRC and 346 tonnes of steel billets in 2Q16. Overall sales quantity increased by 91,078 tonnes or 8.8%.
Total cost of sales increased by 22.5% to RMB2.6 billion from RMB2.1 billion.
Net profit margin was 11.9% in 2Q17 compared to 11.2% in 2Q16.
Delong says while steel prices enjoyed a buoyant first half in 2017 driven by strong infrastructure and property construction spending, the operating outlook for China’s steel industry is expected to remain challenging as steel prices remained volatile, as well as continued government efforts to reduce excess capacity in the steelmaking industry.
Shares in Delong closed 1 cent lower at $1.50 on Tuesday.
