On January 11, Jiangsu Province-based Chinese steelmaker Shagang Co., Ltd issued its estimated adjusted financial results for 2012, indicating a net profit of RMB 13-40 million ($2.1-6.4 million), with a decrease of 85-95 percent compared to its net profit of RMB 278 million ($44.3 million) in 2011. On October 26 last year, Shagang had predicted a net loss of RMB 10-30 million ($1.6-4.8 million) for 2012.
Shagang stated that the difference between the two net profit estimates was mainly due to the company’s increased profit in the four quarter last year amid the recovery of the special steel market in the given quarter. Meanwhile, Shagang Group’s subsidiary Huaian Huaixin New Construction Material Co., Ltd received enterprise development support funds worth RMB 32 million ($5.1 million) from local government authorities on December 31, 2012, which was included in the net profit of Shagang Co. for 2012. The funds were considered as operating income and contributed a calculated RMB 15.3096 million ($2.4 million) to the net profit figure.