Baosteel Group sees profit plunge 20 pct in 2011
Shanghai. January 19. INTERFAX-CHINA - Baoshan Iron Steel Group (Baosteel Group) saw total earnings of RMB 18.7 billion ($2.96 billion) in 2011, down 20.8 percent on an annual basis, the firm announced Jan. 17.
Steel output for the year amounted to 44.27 million tons while sales revenue totaled RMB 313.3 billion ($49.59 billion).
Meanwhile, the group's Shanghai Stock Exchange-listed unit, Baoshan Iron Steel Co. Ltd., expects a 42.24 percent year-on-year drop in net profit to RMB 7.72 billion ($1.22 billion), it said in a preliminary 2011 operations report released Jan. 14.
The group is committed to diversification at a time of low profits for steelmakers, the chairman Xu Lejiang said Jan. 17. Non-steel businesses accounted for about one-sixth of its total profits in 2010 and covered industries including financial services and real estate.
Other Chinese steelmakers are also seeking to diversify amid ongoing gloom in the sector. Wuhan Iron Steel Group said less than half of total profits in the first half (H1) of 2011 came from its core business, a first for a Chinese steelmaker.
Anshan Iron Steel Group, Taiyuan Iron Steel Group and Jiugang Group, meanwhile, are moving into areas such as food, real estate and manufacturing equipment.
Though diversification has only recently emerged as a trend among Chinese steelmakers, other global steel giants have already gone down this route. Japan's Nippon Steel now derives around 35 percent of revenue for non-core businesses, while for India's Tata Steel the figure is about 40 percent.
- KHM