General Steel Holdings, a non-state-controlled steel producer in China, announced its results for the first quarter ended March 31, 2015. Total sales decreased by 44.8% year-over-year to $328.2 million, compared with $594.2 million in Q1 2014.
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The year-over-year sales decrease was primarily due to decreases in both total sales volume and average selling price of rebar.
Total sales volume in the first quarter of 2015 was 0.95 million metric tons, a decrease of 27.6% compared with 1.32 million metric tons in the first quarter of 2014.
The average selling price of rebar at Longmen Joint Venture in the first quarter of 2015 decreased to approximately $343.8 per metric ton, down by 23.7% from $450.9 per metr
Gross loss for the first quarter of 2015 was $(32.1) million, or (9.8)% of total sales, as compared with gross loss of $(22.6) million, or (3.8)% of total sales in the first quarter of 2014.
The decrease in gross margin was mainly due to a steeper decrease in average selling price of rebar, compared with the decrease in unit cost of manufactured rebar, as well as a higher fixed manufacturing cost, as the Company proactively paused production for maintenance during the first quarter of 2015.
Selling, general and administrative expenses for the first quarter of 2015 were $17.4 million, a decrease of 17.6% from $21.1 million in the first quarter of 2014. General and administrative expenses decreased to $11.0 million in the first quarter of 2015, compared with $12.8 million in the first quarter of 2014. Selling expenses were $6.4 million in the first quarter of 2015, compared with $8.3 million in the same period of 2014.
The Company accrued unallocated overheads expenses of $19.1 million in its operating expenses for the first quarter of 2015, which was mainly due to the reallocation of fixed overheads from cost of goods sold to general and administrative in accordance with GAAP, as the Company had temporarily shut down production for maintenance during the period.
Other operating income from a change in the fair value of profit sharing liability during the first quarter of 2015 was $12.9 million, compared with a loss on change in fair value of profit sharing liability of $0.05 million in the same period of last year.
Correspondingly, loss from operations for the first quarter of 2015 totaled $(55.7) million, compared with $(43.7) million for the first quarter of 2014.
Finance and interest expense in the first quarter of 2015 was $20.6 million, of which $5.2 million was the non-cash interest expense on capital lease, as compared with $5.1 million in the same period of 2014, and $15.4 million was the interest expense on bank loans and discounted note receivables, as compared with $23.6 million in the same period of 2014.
Net loss attributable to General Steel for the first quarter of 2015 was $(45.1) million, or $(0.73) per diluted share, based on 62.0 million weighted average shares outstanding. This compares to a net loss attributable to General Steel of $(43.6) million, or $(0.78) per share, based on 55.8 million weighted average shares outstanding in the first quarter of 2014.
The increase in shares count of weighted average shares outstanding was primarily due to the issuance of 5 million shares of the Company's common stock pursuant to a $7.5 million private placement which closed in October 2014.
As of March 31, 2015, the Company had cash and restricted cash of approximately $259.6 million, compared to $367.3 million as of December 31, 2014. The Company had an inventory balance of $148.3 million as of March 31, 2015, compared to $156.3 million as of December 31, 2014. ■