China's Beijing-headquartered special grade steel maker General Steel Holdings, Inc. (General Steel) has announced record financial results for the second quarter ended on June 30, 2007.
According to the data, the company obtained $121.3 million in sales revenue in the second quarter of 2007, up 312 percent year on year. Meanwhile, the company's gross profit reached a record $8.11 million, up 410 percent in the same period. Net income indicated a tremendous increase of 2,086 percent year on year and reached $1.9 million in the same quarter. With these bright results, earnings per share rose to $0.06, up from $0.003 in the same period of last year.
The company also indicated four major achievements in the second quarter: the commencement of operations in June 2007 of its joint venture with Shaanxi Longmen Iron and Steel Group Co., Ltd; the finalization of 80 percent ownership in a joint venture agreement with Baotou Iron & Steel Group, which is to begin production in the third quarter of 2007; the purchase of the remaining 30 percent of outstanding shares in its Tianjin-based subsidiary; and the increase in the aggregate annual production capacity from 400,000 tons to three million tons (up 650 percent).
General Steel currently runs three steel factories in China. These are as follows:
Tianjin Daqiuzhuang Metal Sheet Co., Ltd. operates ten production lines capable of producing 400,000 tons of hot rolled carbon and silicon steel sheets used mainly in the agricultural vehicle market. It has an approximate 50 percent market share for steel sheets used in the production of light agricultural vehicles in China. General Steel owns 100 percent of this business unit.
Baotou Steel & General Steel Special Steel Pipe Joint Venture Co., Ltd, which obtained its business license in May 2007, has four production lines capable of producing 100,000 tons of spiral-weld pipes used mainly in the energy sector to transport oil, natural gas and steam. General Steel owns 80 percent of this joint venture.
Shaanxi Long Men Iron & Steel Co., Ltd, which began operating in June 2007, is a joint venture between General Steel and Shaanxi Long Men Iron and Steel Group Co., Ltd. The joint venture involves a fully-integrated steel production facility capable of producing 2.5 million tons of crude steel. It produces a final product mix of rebar and infrastructure-related steel products. General Steel owns 60 percent of this business unit.
Speaking about the success of the company, General Steel's chairman and CEO Henry Yu said, "We executed our growth strategy by gaining controlling interest in two targeted joint ventures. This increased our production capacity from 400,000 tons to three million tons, widened our product mix and gave us a solid regional presence to better serve the rapidly developing western region. We are especially pleased with results from our new Long Men Joint Venture which started only in June and has already had a great impact on earnings."