Shandong Iron & Steel (600022) Q2 2024 earnings summary

Executive summary

• Revenue for H1 2024 was RMB 45.21 billion, down 3.73% year-over-year due to lower steel sales and prices.

• Net loss attributable to shareholders was RMB -968 million, with a basic EPS of -0.0906, reflecting continued industry pressure.

• Operating cash flow improved to RMB 1.50 billion, up RMB 1.84 billion from the prior year.

• Second quarter net loss narrowed by 48.3% compared to Q1, showing sequential improvement.

Financial highlights

• Gross margin remained under pressure as steel prices stayed low and raw material costs were volatile.

• Total assets at June 30, 2024, were RMB 67.08 billion; net assets attributable to shareholders were RMB 20.07 billion.

• Asset-liability ratio stood at 56.08%.

• R&D expenses were RMB 988 million, 2.18% of revenue.

• Non-recurring gains totaled RMB 7.48 million, mainly from government grants and asset disposals.

Outlook and guidance

• Management expects domestic steel demand to remain stable but with ongoing structural decline, especially in construction.

• Manufacturing, automotive, and new energy sectors are expected to support demand.

• The company will continue cost reduction, product optimization, and digital transformation to improve profitability.