Chongqing Iron & Steel Company (1053) H1 2024 earnings summary

Executive summary

• Revenue for the first half of 2024 was RMB15.09 billion, down 28.14% year-over-year, with a net loss attributable to shareholders of RMB689 million, compared to a net loss of RMB435 million in the same period last year.

• The company faced a challenging steel market with declining prices, reduced demand, and increased operational pressure, including weak steel and raw material prices and declining domestic steel consumption.

• No interim dividend was proposed or declared due to accumulated undistributed losses.

Financial highlights

• Revenue decreased 28.14% year-over-year to RMB15.09 billion; cost of sales fell 26.35% to RMB15.56 billion.

• Net loss attributable to shareholders was RMB689 million, with basic and diluted EPS at -0.08 RMB per share.

• Net cash flow from operating activities nearly doubled to RMB823 million, mainly due to reduced inventory capital occupation.

• Gross margin for steel products/iron and steel operations decreased by over 2.6 percentage points year-over-year.

• Total assets at period end were RMB36.5 billion, down 2.3% from year-end 2023; net assets attributable to shareholders decreased 3.78% to RMB19.1 billion.

Outlook and guidance

• The company will continue to focus on cost reduction, energy efficiency, green development, and technological innovation in the second half of 2024 to enhance competitiveness and profitability.

• Management expects continued downside risks in the steel industry and will prioritize cash flow management and value creation.