China Steel : Preliminary Result December 2022

Date：2023/01/31

December 2022	Unit: thousands of NT$
Item	This Month	Last Month	Accumulated, as of December 2022	Accumulated, the same period of previous year
Consolidated Operating Revenues	30,971,250	32,018,052	449,567,488	468,327,501
Consolidated Operating Income	(2,882,328)	(2,234,793)	18,265,353	79,757,273
Consolidated Income Before Income Tax	(2,974,086)	(2,767,362)	23,258,596	84,413,648
Notes: 1.The accumulated preliminary consolidated operating revenues as of December 2022 totaled NT$ 449,567,488 thousand. The accumulated preliminary consolidated operating income totaled NT$ 18,265,353 thousand. The accumulated preliminary consolidated income before income tax totaled NT$ 23,258,596 thousand. 2.Information for the Company's carbon steel sales volume (non-consolidated basis) is as follows: Accumulated sales volume of carbon steel as of December 2022 totaled 8,589,562 tons 3. Accumulated performance summary: The accumulated preliminary consolidated income before income tax decreased compared to that of the previous year. The ASP of steel department increased comparing to the same period of last year, but the sales volume decreased, together contributing to the slightly lower consolidated operating revenues. At the same time, the increase in ASC surpassed that in ASP contributed to the lower consolidated operating income and income before income tax. As global inflation has peaked and the Fed slows the pace of interest rate hike, the economic headwind alleviates following the complete ease of Covid controls in China and the peace talk intentions from both Russia and Ukraine. The US labor market is steadily strong and the economy in the EU is bottoming out. Regarding steel demand, the steel-using sectors in China resume restocking as the government eased border restriction and rolled out massive stimulus policies. Besides, the delayed rigid demand in China is expected to emerge after the Chinese New Year and the steel market is expected to get back to the upward trajectory with the ease of supply chain bottleneck and stimulus policies on the housing and auto market. As for steel supply, the effect of production cut at main steel mills emerges and the World Steel Dynamics (WSD) projects that the global crude steel output in 2023 will see a YOY reduction of 1.5% to reach 1,822 million tons. The trend of global steel supply shrink is expanding and the international steel price is picking up. The steel market is expected to enter into restocking cycle after the Chinese New Year and an U-shaped rebound is around the corner.

Comparison between the accumulated number as of this month and the same period of previous year
Item	Accumulated, as of December 2022	Accumulated, the same period of previous year	Difference	Difference in percentage
Consolidated Operating Revenues	449,567,488	468,327,501	(18,760,013)	(4)
Consolidated Operating Income	18,265,353	79,757,273	(61,491,920)	(77)
Consolidated Income Before Income Tax	23,258,596	84,413,648	(61,155,052)	(72)