Baoshan Iron and Steel Co Ltd<600019>, China's largest steel producer, said its net profit rose 18.2% year on year to RMB 9.645 billion for the first half of this year, according to the interim report of the Shanghai-listed company.
Revenue in the period was up 10.11% year-on-year to RMB 103.6 billion. However, the operating cash flow dropped from RMB 5.54 billion to RMB 2.77 billion in the first half, due to rising costs. Earnings per share were RMB 0.55.
The company attributed the profit rise to the surging sales prices of steel and relatively lower energy costs achieved by applying new technologies and improving its product structure.
Baosteel targets to achieve a revenue of RMB 200 billion for the full year of 2008. Revenue earned in the first half accounted for 51.82%. However, the company said in the second half, it would face pressure from the tight coal supply, the increasing price of iron ore and a possible decline in demand growth.
In view of sluggish demand from China's automobile and home appliance sectors, the company announced earlier this week that it would lower its fourth-quarter cold-rolled and hot-rolled steel product prices by RMB 300 and RMB 200 respectively, from the fourth quarter of this year.
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