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05 July 2008 |
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iSteelAsia Announces 2003/04 Third Quarter Results (February 13, 2004 – HONG KONG) iSteelAsia Holdings Limited (“iSteelAsia” or the “Group”, stock code: 8080) today announced its unaudited consolidated results for the nine months ended December 31, 2003. During the period under review, the Group recorded a turnover growth of 117% to approximately HK$1,123 million over the corresponding period last year. This achievement is attributable to the increase of iSteelAsia’s market share in the China steel market. However, the Group's profitability was severely affected by the adverse business environment and reported a net loss of approximately HK$2.9 million for the three months ended December 31, 2003, against net loss of HK$4.2 million for the three months ended September 30, 2003. Basic loss per share for the quarter was HK0.18 cent. “The majority operating environment of the Group's core markets was severely affected by the unexpected epidemic of SARS which was significantly worse than the management's expectation. Demand for steel in these cities came to a halt due to the inter-city quarantine restrictions, and in turn adversely affected the market prices and also customer demands of our steel products. Further, this resulted in an increase in our inventory stock-up cost and inevitably eroded our margins,” Drina Yue, CEO of iSteelAsia said. Drina continued, “Among those adversely hit offices, Beijing and Tianjin were the worse hit and adversely affected the Group's inventory turnover rate. As such, we have taken concerted effort and mobilised the Group's sales office network to mitigate the difficult situation. In addition, we have decided to extend business to the second tier cities, such as Wuxi and Shungde, which would enhance our market shares and further diversify the customer base. Although these moves should have increased one-time cost to the operation and lower initial margin to penetrate the market, this market expansion and diversity strategy seeds for the Group's long term growth and benefit.” With the expansion into the second tier cities, which are the foundations of manufacturing plants, and its established sales network, iSteelAsia covers the majority of the highest average annual income per capita cities in China. The coverage would translate into high demands for household appliances, real estate properties and infrastructure construction, which are the key driving forces for steel consumption. On the other hand, operating cost to turnover ratio had decreased from 5.8% in fiscal year 2002 and stabilised at around 2% - 3% during the period under review, which clearly reflected the Group's successful efforts in optimising its resources for economies of scale to achieve business growth. Commenting on the future development, Drina said, “China's crude steel production in December 2003 continued an upward trend set in the past months, with year-to-date production of approximately 220 million metric tones or 9.7% increase over the year-to-date figure in the past year. It is obvious that China has the vast potential for the Group to flourish.” “At the same time, the Group will continue to undertake rationalisation of its resources and corporate structure to achieve the best operational efficiency and build a sound customer base. Having diversified our geographic coverage, the management is confident and optimistic towards the future of the Group as a major steel distributor in the PRC,” Drina concluded. - End - For further information, please contact:  |
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