iSteelAsia Reports Satisfactory Quarterly Results
Improved Operational Efficiency Lays Foundation for Future Growth
(August 14, 2003 ¡V HONG KONG) iSteelAsia Holdings Limited ("iSteelAsia" or the "Group", stock code: 8080) today announced its unaudited consolidated results for the three months ended June 30, 2003 ("FY2004Q1".
iSteelAsia achieved continuous growth in the period under review. As compared to the same period last year, turnover rose 124% to approximately HK$398 million. Profit attributable to shareholders amounted to approximately HK$625,000 while basic earnings per share was HK0.04 cent.
The increase in turnover was mainly attributed to the well-developed sales network and continuing support from suppliers and customers, as well as a testimony of the Group`s investment in China. Despite the severe outbreak of SARS in China, such increase in FY2004Q1 marks an impressive achievement demonstrating the Group`s ability to react in difficult situations.
"The operating environment in China has been very difficult and highly volatile in the past few months. Business activities in cities such as Beijing and Tianjin literally came to a halt. Some of our customers, mainly manufacturing factories and construction companies were forced to close their operations in compliance of the PRC quarantine policies for two to three months, which in turn, adversely affected the Group`s business. Steel price also dropped due to the sudden diminished demand. To mitigate the situation, the Group mobilized its whole distribution network in China, and some of the inventories were relocated to other sales offices in China. Although this raised the transportation cost and eroded the Group`s profit margins, iSteelAsia`s geographically diverse network has successfully proven its ability to hedge against any sudden volatility and able to sustain continuous growth while maintaining profitability. Our flexibility and ingenuity has proven that we can tackle any challenges especially in the PRC," commented Drina Yue, CEO of iSteelAsia.
The Group is also encouraged by its efforts in raising operational efficiency and achieving cost reduction. Operating cost to turnover in FY2004Q1 continued to reduce to 2.17% from 5.80% a year ago. The enhanced efficiency lays a solid foundation for the Group`s future development.
Looking ahead, Drina said, "Business in cities being affected is picking up rapidly especially after the end of June. Steel prices are also recovering to a more healthy level, due to normal demand of steel products from the reopening of the manufacturing sectors. The market appeared to have weathered the epidemic and is back on track to achieve healthy growth."
"We are optimistic with the Group`s development as a major steel distributor in the PRC. We believe that in the long run, the quality of local production capabilities will continue to improve while in the short to medium terms, import of steel, especially for flat products, will continue to increase until local capabilities have achieved global standards and specifications. In addition, we have changed our product mix, incorporating higher premium products such as PPGI and stainless steel. A new sales office in Wuxi has been set up this quarter. Going forward, we will establish more sales offices to strengthen our geographical network and expand our customer base. Our role to be a quality value provider will continue to be flexible and adapt to capture the huge PRC market opportunities," Drina concluded.
- End -
For further information, please contact:
iSteelAsia Holdings Limited
Ms. Betty Jane Leon
Senior Marketing Manager
E-mail: betty.leon@isteelasia.com
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