(Updates with share price in fourth paragraph.)
Oct. 28 (Bloomberg) -- Angang Steel Co., the largest Hong Kong-listed Chinese steelmaker, turned to a profit in the third quarter after provisions made for inventory losses fell.
Net income was 19 million yuan ($3 million) in the three months ended Sept. 30, compared with a loss of 178 million yuan a year earlier, the Anshan, Liaoning-based company said today in a statement to the Shenzhen stock exchange. That matched the preliminary estimate it announced on Oct. 14. Sales dropped 2 percent to 23.4 billion yuan.
Angang set aside 96 million yuan in the third quarter for losses incurred in the value of its assets. That was 72 percent less than a year earlier. Cost cutting also increased profit, it said.
Angang declined 2.6 percent to close at HK$4.95 in Hong Kong trading today, before the earnings announcement. The benchmark Hang Seng Index advanced 1.7 percent. Nine-month net income plunged 95 percent to 122 million yuan from a year ago, Angang said, partly because of higher raw material costs and slowing demand.
China, the world’s biggest steelmaker, expanded at the slowest pace since 2009 in the third quarter on weaker export demand and monetary tightening. Vehicle sales will grow less than 5 percent this year, after surging 32 percent in 2010, the China Association of Automobile Manufacturers said Oct. 11, reducing its forecast for the second time in three months
Chinese steel prices have declined since mid-September amid a slowing global economy and moderating demand. Steel prices last week plunged 8.8 percent, the most since the 2008 global economic crisis, signaling mills may further cut production.
Angang halted a blast furnace for one-and-a-half months for maintenance amid weakening demand and falling prices, board secretary Fu Jihui said Oct. 18. The shuttering will cut annual output by about 320,000 metric tons of iron, or about 1.4 percent of production in 2010.
--Helen Yuan. Editors: John Chacko, Rebecca Keenan
To contact Bloomberg News staff for this story: Helen Yuan in Shanghai at email@example.com
To contact the editor responsible for this story: Rebecca Keenan at firstname.lastname@example.org