March 29 (Bloomberg) -- Baoshan Iron & Steel Co., China’s biggest public-traded steelmaker, said profit fell 42 percent last year to the lowest level since 2009 after an asset sale inflated inflated earnings a year earlier.
Net income declined to 5.82 billion yuan ($937 million), or 0.35 yuan a share, from 10.1 billion yuan, or 0.0.58 yuan, the Shanghai-based company said yesterday in a stock-exchange filing. Sales fell 0.7 percent to 189.7 billion yuan.
Baoshan recorded a one-time gain of 9.09 billion yuan in 2012 by selling stainless-steel and specialty-steel units to its parent. The supplier of half of China’s automotive steel is set to benefit from the nation’s growing appetite for cars even as officials in Beijing enact policies to tackle a steel overcapacity.
In 2014, the company said it “will put limited resources into products with stronger margins and is seeing sales from cold-rolled automobile plates growing 10.8 percent from a year earlier” amid an oversupply in steel industry.
Vehicle sales may rise 10 percent in 2014, after increasing every year since 2000, the China Association of Automobile Manufacturers estimates. Baoshan has become the top pick among analysts, beating global peers including ArcelorMittal and Nippon Steel & Sumitomo Metal Corp., according to data compiled by Bloomberg.
Premier Li Keqiang said this month China needed tough measures and rules to fight pollution after its top banking regulator said the country is trimming small steel mills to cut overcapacity and will impose strict credit guidelines on big polluters.
Baoshan Steel added 0.3 percent in Shanghai trading to close at 3.81 yuan yesterday, before the earnings statement. The stock has declined 19 percent over the past 12 months, more than the 8.7 percent drop in the benchmark Shanghai Composite Index.
China’s biggest steelmakers had a combined loss of 1 billion yuan in January, with a record 43 percent incurring a loss, according to the China Iron & Steel Association. The first quarter was the “worst” for mills since 2000, with total steel consumption falling 8.6 percent in January from a year ago, outpacing a 3.2 percent drop in production, the trade group said March 14.
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