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General Steel announces financial results for Q2 of 2014

General Steel Holdings Inc announced its financial results for the Q2 ended June 30th 2014.

Q2 2014 Financial Information;
1. Sales volume decreased by 5.7% YoY to approximately 1.31 million tonnes, compared with 1.38 million tonnes in the Q2 of 2013.
2. Sales totaled USD 588.0 million, compared with USD 653.7 million in the Q2 of 2013.
3. Gross profit was USD 28.1 million on gross margin of 4.8%, compared with a gross loss of USD (35.5) million in the Q2 of 2013.
4. Operating income totaled USD 6.3 million, compared with an operating loss of USD (46.9) million in the Q2 of 2013.
5. Net loss attributable to the Company reduced to approximately USD (11.0) million, or USD (0.20) per diluted share, compared with a net loss of USD (39.8) million, or USD (0.72) per diluted share in the Q2 of 2013.
6. As of June 30th 2014, the Company had cash and restricted cash of USD 492.9 million.

First Six Months 2014 Financial Information;
1. Sales volume decreased by 2.4% YoY to approximately 2.62 million tonnes, compared with 2.69 million tonnes in the first six months of 2013.
2. Sales were USD 1.2 billion, compared with USD 1.3 billion in the first six months of 2013.
3. Gross profit was USD 5.5 million on gross margin of 0.5%, compared with a gross loss of USD (31.5) million in the first six months of 2013.
4. Operating loss was USD (37.3) million, compared with an operating loss of USD (15.0) million in the first six months of 2013.
5. Net loss attributable to the Company was USD (54.6) million, or USD (0.98) per diluted share, compared with a net loss of USD (36.7) million, or USD (0.67) per diluted share in the first six months of 2013.

Q2 2014 Financial and Operating Results;
Total Sales;
1. Total sales for the Q2 of 2014 decreased by 10.0% YoY to USD 588.0 million, compared with USD 653.7 million in the Q2 of 2013. The YoY sales decreases were due to decreases in both average selling price of rebar and sales volume.

2. Total sales volume in the Q2 of 2014 was 1.31 million tonnes, a decrease of 5.7% compared with 1.38 million tonnes in the Q2 of 2013.

3. The average selling price of rebar at Longmen Joint Venture in the Q2 of 2014 decreased to approximately USD 450.0 per tonne down by 6.8% from USD 482.7 per tonne in the Q2 of 2013.

Mr Henry Yu chairman and CEO of General Steel said that “We are very proud that our turn-around efforts are now driving measurable improvements to our financials, as gross margin expanded to a 36 month high and EBITDA substantially improved to a positive USD 33.6 million. These highlights reflect the success we have had over the past year in lowering our unit production cost and enhancing our operating efficiencies. During the second quarter, industry fundamentals significantly improvedand we were able to hold firm on our pricing. We are seeing a better demand and supply balance, and it is increasingly more evident that the market dynamics and competitive landscape will substantially improve in the coming months.”

Mr John Chen CFO of General Steel said that “This quarter we saw contributions to profitability from our two major initiatives. Our sourcing strategy lowered our raw material costs and, our upgraded production lines and technical improvements lowered our unit costs. We also turned around our operating cash flows to an inflow of USD 56.1 million, providing us with greater operating flexibility for the quarters ahead. Given our solid execution and the improved market fundamentals, we anticipate additional margin expansion and are confident that we will deliver on our target EPS range of 8 to 12 cents for the second half of 2014.”

Source – Strategic Research Institute

(www.nctv.net)

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