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| Operating revenue increased by 24.7% over last year to RMB206.8 billion |
TOKYO, Apr 1, 2011 - (ACN Newswire) - Metallurgical Corporation of China Ltd. ("MCC" or "The Company", SEHK: 1618) today announced its annual results for the year ended Dec. 31, 2010.
-- Operating revenue increased by 24.7% over last year to
RMB206.8 billion (H shares: RMB206.4 billion). Net profit
attributable to the Parent reached RMB5.32 billion,
representing a year-on-year increase of 20.2%.
-- Newly-signed contract value of engineering and construction
business amounted to RMB218.5 billion, representing an
increase of 18.1% as compared with the same period last year.
-- Production volume of machinery and equipment reached 21,900
tons, representing a year-on-year increase of 37.6%.
-- Production volume of the poly-silicon business reached 4,117
tons, representing a year-on-year increase of 87.7%.
-- Gross floor area of new development projects of social
welfare housing over the year was 5.64 million sq.m.
In 2010, MCC achieved remarkable results. As operating revenue increased steadily, its gross profit and gross profit margin continued to increase. In particular, operating revenue increased by 24.7% over last year to RMB206.8 billion (H shares: RMB206.4 billion). Net profit attributable to the Parent reached RMB5.32 billion, representing a year-on-year increase of 20.2%.
MCC had been actively engaged in business transformation in all fronts. In line with its development, the Company had reduced its over-reliance upon iron and steel metallurgy in the engineering and construction segment by proactively expanding into non-metallurgical engineering and construction business such as building construction and transportation infrastructure, with a focus on overseas construction markets such as Middle East and Brazil, which proved remarkable success. Currently, 58.8% of the total operating revenue (H shares: 58.2%) is contributed by the Company's non-metallurgical business (including equipment manufacturing, resource, development and real estate). In 2010, newly-signed contract value of engineering and construction business amounted to RMB218.5 billion, representing an increase of 18.1% as compared with the same period last year. Contracts pending completion amounted to RMB289.2 billion, representing an increase of 27.8% as compared with the same period last year. Newly-signed contract from overseas business amounted to RMB26.66 billion (equivalent to US$4.03 billion) while overseas contracts pending completion amounted to RMB40.1 billion (equivalent to US$6.06 billion). In 2010, within the engineering and construction segment, revenue from non-metallurgical engineering and construction reached RMB70.4 billion (H shares: RMB71.4billion) , representing an increase of 43.7% (H shares: 44.8%) as compared with the same period last year. Operating revenue from non-metallurgical construction in proportion to the total operating revenue from engineering and construction business increased to 45% (H shares: 45%).
With the gradual release of production capacity, all indicators of equipment manufacturing business of the Company gradually improved, thus laying a sound foundation for other segments. In 2010, the production volume of machinery and equipment reached 21,900 tons, representing a year-on-year increase of 37.6%. Production volume of products of the ferrous metallurgy and rolling processing industry was 69,600 tons, representing a year-on-year increase of 19.4%. The production volume of steel structures from factories was 1.185 million tons, representing a year-on-year increase of 22.4%.
As for the Company's resource development segment, the Company had made active progress for earlier commissioning of its existing mine projects in 2010, steady progress was made in developing the Ramu Nico project, Papua New Guinea and other overseas mine projects. The poly-silicon business presented enormous potential for profit growth, given a decrease in costs and supply shortage. In 2010, the production volume of the business reached 4,117 tons, representing a year-on-year increase of 87.7%. In 2011, as phase 5 of the construction progressed smoothly, the production capacity of the business will increase to 10,000 tons. Besides, the Company intends to invest in 20,000 tons of production capacity.
The real estate development business of the Company experienced rapid growth. In 2010, the total investment in new real estate development projects and primary land development projects amounted to approximately RMB176.0 billion, with a planned gross floor area of 23.47 million sq.m, among which the gross floor area of new development projects of social welfare housing over the year was 5.64 million sq.m. (The planned gross floor area of social welfare housing was 30.54 million sq.m. if projects that had been accumulated due to uncompleted construction and those for which development agreements had been entered into but without obtaining land use rights as well as projects from construction commission in the previous year).
During the period of Twelfth Five-Year Plan, we still see opportunities from the structure of the China's iron and steel industry. On one hand, the planned urbanization rate increased form 47.5% to 51.5%. Investment in fixed assets of highway remained substantial and construction of urban transit transportation will see a new round of rapid growth. All these factors will contribute to the business growth of MCC.
Benefited from industry upgrade and restructuring of product portfolio among iron and steel industry players as well as guidance and support of the state, the metallurgical equipment industry aspired to increase value-added of products so as to realize growth amidst restrictions over new production capacity in the iron and steel industry. Moreover, the Company owned a group of industry-leading steel structure enterprises in China such as Baoye which undertook the construction of a range of landmark architecture such as the Bird's Nest, the pavilions in the World Expo and the stadium of Guangzhou Asian Games.
Resources development segment will be one of the major focuses of the Company in future business development. With a focus on the development of rare metal minerals and overseas resources, the Company's mineral resource development business has received upfront support from the government. In 2010, the global consumption of cooper, nickel and zinc recorded more rapid growth than last year. Driven by the fast-growing downstream industries such as automobile, home appliance and electronics, domestic demand for resources continued to increase. Meanwhile, poly-silicon remains a major sub-segment of the Company's resources development. As estimated by Joint Research Centre of the European Commission, the global PV power generation will significant increase and account for 20% of primary energy by 2050. In recent years, China has spared no effort in developing new energy. In stating that new energy consumption will account for 15% of total energy consumption by 2020, it promulgated policies such as the "Notice on the Successful Implementation of Photovoltaic Projects of Golden Sun". Following the growth in PV power generation, demand for poly-silicon will soar. MCC has the only National Engineering Laboratory in the domestic poly-silicon industry and its production capacity in this field will reach 10,000 tons by 2011. Meanwhile, plans are afoot to invest in 20,000 tons of production capacity.
Real estate segment is another major focus of the Company in future business development. During the period of China's Twelfth Five-Year Plan, a total of 36,000,000 units of social welfare housing will commence construction, 10,000,000 units has commenced construction in 2011. Ministry of Housing and Urban-Rural Development has already set the schedule for construction of social welfare housing in regions and required all social welfare housing projects to commence full-scale construction by the end of October this year. Since our massive expansion into social welfare housing development business in 2009, MCC has performed remarkably in social welfare housing. It ranked 1st in terms of social welfare housing construction among state-owned enterprises and earned high praise from SASAC in various occasions. As at 2010, we were granted credit facilities of RMB45.0 billion from various commercial banks for social welfare housing projects. Many of our subsidiaries established a sound image as a state-owned enterprise in local regions and won accolade from local governments. Our partnership with governments continued to increase, with MCC Hi-Tech, MCC 22, MCC 17 and Baoye Construction being enlisted as key units for cooperation with governments in social welfare housing in Tianjin, Tangshan, Ma'anshan, Cixi and Shanghai, respectively. On commodity housing, MCC has accumulated extensive experience in developing commodity housing and has initially developed seamless development procedures and groomed a group of real estate professionals. Hence, the reputation, recognition and profile of MCC Real Estate increase year on year. All these key factors have laid strong foundation for MCC To grow its business and expand in scale.
Looking forward, thanks to the care and support of public investors, analysts and the financial media, the Company will continue to work towards becoming the world's top class enterprise with international competitiveness. To this end, the Company will achieve the following tasks:
1. continue to reinforce and strengthen its leading position in the global metallurgical engineering and construction market;
2. enhance the proportion of revenue from metallurgical construction business in addition to consolidating and enhancing our leading role in metallurgical engineering and construction market. By 2015, it is expected that around 70% of the total revenue will be contributed by the operating revenue from non-metallurgical business (including equipment manufacturing, resource development and real estate), while 60% of the operating revenue from the construction segment will be attributable to non-metallurgical construction business;
3. adjust industry structure to increase the contribution of resources development, real estate development and other engineering and construction businesses to the operating results of the Company. By 2015, revenue from resources development and real estate development will account for 12% and 10% of the total revenue of the Company, respectively. We will also become one of the largest enterprises integrating mining, processing and smelting of non-ferrous metal resources in China as well as one of the pioneers in the real estate industry.
4. leverage our advantages to expand overseas markets, with a focus on tapping into overseas engineering and construction markets. By 2015, revenue from overseas business is expected to account for 30% of the total revenue (including revenue from overseas resources project);
5. MCC has core competency in technical innovation. We will continue to strengthen research and development of core technologies in respect of metallurgy, equipment and resources development whilst actively fostering product-orientation and industrialization in this respect;
6. the Company will also further increase the reputation of MCC brand.
Contact:
Wonderful Sky Financial Group Company Limited
Daisy Sun
Dir: +852 3970 2185
Fax: +852 2598 1588
Email: daisysun@wsfg.hk
Erica Liu
Dir: +852 3970 2150
Fax: +852 2865 1638
Email: ericaliu@wsfg.hk
Wu Chen
Dir: +852 3970 2150
Fax: +852 2865 1638
Email: wuchen@wsfg.hk
Topic: Earnings
Source: Metallurgical Corporation of China Ltd.
Sectors: Metals & Mining, Daily Finance
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From the Asia Corporate News Network
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