Baosteel(SH:600019)2017-04-27 16:00Financial Performance - In 2016, Baoshan Iron & Steel Co., Ltd. reported a revenue of RMB 185,459 million, an increase of 13.23% compared to RMB 163,790 million in 2015[18]. - The net profit attributable to shareholders reached RMB 8,966 million, a significant increase of 849.33% from RMB 944 million in 2015[18]. - The net profit excluding non-recurring gains and losses was RMB 8,994 million, reflecting a 711.29% increase from RMB 1,085 million in 2015[18]. - The company's basic earnings per share (EPS) for 2016 was RMB 0.55, an increase of 850.32% compared to RMB 0.06 in 2015[19]. - The net profit attributable to shareholders for Q4 2016 was RMB 3,368 million, with a total annual net profit of RMB 8,970 million, up from RMB 940 million in 2015[20][29]. - The total profit for the year reached 11.52 billion yuan, an increase of 553% compared to the same period last year, ranking second among global steel companies with over 20 million tons, and first in profit per ton of steel[31]. - The company achieved a net cash inflow from operating activities of 18.41 billion yuan in 2016, alongside a cost reduction of 5.85 billion yuan[113]. - The company's net profit from Shanghai Baoshan Iron & Steel Co. was RMB 3.6 billion for the year 2016[6]. Dividends and Shareholder Returns - The company plans to distribute a cash dividend of RMB 0.21 per share, totaling RMB 4,641,557,954.25, which accounts for 51.77% of the net profit attributable to shareholders[2]. - The cash dividend payout ratio for 2016 is 67.37% of the net profit in the corporate financial statements[125]. - The total cash dividends and buybacks in 2016 amounted to ¥46.42 billion, significantly higher than ¥9.88 billion in 2015[125]. - The cash dividend per share increased from ¥0.06 in 2015 to ¥0.21 in 2016, reflecting a commitment to shareholder returns[125]. - The company has maintained a consistent cash dividend policy, with a minimum payout of 50% of the audited net profit since 2012[124]. Operational Highlights - The company achieved a 16.8% increase in unique leading product sales, totaling 1,453.9 million tons in 2016[29]. - The total sales volume of commodity billets reached 24,087 million tons, an increase from 22,148 million tons in 2015[29]. - The company successfully reduced costs by RMB 5,850 million in 2016, exceeding the planned target of RMB 4,000 million[29]. - The company launched 10 new flagship products/technologies in 2016, compared to 5 in 2015[29]. - The company completed the capacity reduction target of 4.65 million tons ahead of schedule, with specific reductions of 3.45 million tons and 1.2 million tons from two projects[25]. Market and Competitive Position - The company faces challenges in 2017 due to an oversupply in the steel market and the need to enhance profitability following the merger with Wuhan Steel[5]. - The company aims to leverage synergies and scale effects from the merger with Wuhan Steel to improve its competitive position[5]. - The company exported 35.6% more in volume compared to the previous year, reflecting an increase in overseas high-end market capabilities[27]. - The company anticipates a slight increase in global crude steel production by 0.1% to 1.62 billion tons in 2017, despite challenges in the Chinese market[11]. Environmental and Social Responsibility - Baoshan Iron & Steel Co., Ltd. emphasizes the importance of environmental compliance and urban coordination in its operations[5]. - The company invested 1 billion RMB in environmental technology improvements, including emissions control and green factory initiatives[50]. - The photovoltaic power generation project produced 60 million kWh annually, equivalent to saving 19,000 tons of standard coal and reducing CO2 emissions by 47,000 tons[50]. - In 2016, the company directly invested RMB 12.84 million in poverty alleviation efforts, with RMB 6.85 million allocated to infrastructure and RMB 2 million to industry development[183]. Strategic Initiatives and Future Plans - The company plans to produce 45.22 million tons of iron and 46.19 million tons of steel in 2017, with a total revenue target of 338.5 billion yuan and a cost target of 310.2 billion yuan[114]. - The company aims to reduce costs by over 6 billion yuan in 2017 and achieve a synergy benefit of over 1 billion yuan from the Baowu merger[114]. - The company plans to invest 15.9 billion yuan in fixed assets in 2017, focusing on optimizing product structures and upgrading facilities across multiple bases[118]. - The company has a total of 10 poverty alleviation projects planned for 2017, focusing on integrated village advancement, industry development, and education training[187]. Merger and Acquisition Activities - In February 2017, Baosteel merged with Wuhan Steel, resulting in the third-largest crude steel production and automotive sheet production globally, and the largest production of oriented silicon steel[31]. - The company is in the process of a share swap merger with Wuhan Steel, with the merger agreement signed on September 22, 2016[177]. - The company completed the merger with Wuhan Iron and Steel Corporation on February 27, 2017, with new shares listed on the same day[179]. - The company received approval from the State-owned Assets Supervision and Administration Commission for the merger plan on October 17, 2016[178]. Financial Management and Investments - The company’s financial expenses decreased by 8.6% to 2.186 billion RMB compared to the previous year[57]. - The company’s cash flow from operating activities decreased by 22.7% to 16.373 billion RMB[57]. - The company has committed to a guarantee amount of RMB 7 billion for the repayment of 14 WISCO bonds, effective from the date of merger completion[169]. - The company has entrusted cash asset management with a total amount of RMB 44.383 billion, with actual returns amounting to RMB 660.9 million[172]. Legal and Compliance Matters - The company has committed to providing accurate and complete information regarding the restructuring to Baosteel and Wuhan Steel, ensuring no misleading statements or omissions[131]. - The company guarantees that all documents and information provided during the transaction process are true, accurate, and complete, and it will bear legal responsibility for any inaccuracies[133]. - The company has pledged to maintain the independence of Baosteel's personnel post-transaction, ensuring that key management will not hold positions in other companies controlled by Baosteel[133]. - The company will ensure that Baosteel Co., Ltd. has independent decision-making capabilities regarding its financial resources[135].