Chongqing Iron reports sharp decline in profits

Chongqing Iron reports sharp decline in profits

Chongqing Iron & Steel Company, a producer of plates, sections and wire rods in central China, reported that its net profits fell 20.85 percent in the first half. The rising costs of raw materials, the decrease in real estate investments and the oversupply in the construction steel market dragged down Chongqing Steel's profits during the first six months of 2005. 2005 first-half net profit stood at RMB 392.56 million ($48.4 million), down 20.85 percent from RMB 495.99 million a year earlier. Even though Chongqing Steel increased its average steel marketing price by 10 percent, the company's gross profit fell by RMB 14.5 million year on year to RMB 793.9 million. Despite the decline in profits, company officials say that first half earnings already account for 86 percent of the full-year forecast.