Delong back in the black for Q2

DELONG Holdings returned to the black for the second quarter, posting a net profit of 71.19 million yuan (S$14.45 million) yesterday, against a net loss of 14.26 million yuan a year ago. The turnaround was despite a 4.6 per cent decline in revenue to 2.52 billion yuan.

The Chinese steel manufacturer attributed the decrease in revenue mainly to a decrease in the average selling prices and sales volume of hot-rolled coils. In the April-June quarter, Delong saw a 3.3 per cent year-on-year fall in overall sales quantity, with 660,601 tonnes of hot-rolled coils and 186,763 tonnes of steel billets sold.

But while revenue dipped, cost of sales dropped by a bigger 10.6 per cent to 2.29 billion yuan, resulting in gross profit margin rising 6.1 percentage points to 9.2 per cent. "The increase was primarily due to the decrease in prices of raw materials, which significantly outpaced the decrease in average selling prices of products sold," said Delong.