March 5, 2020 / 1:55 PM / 3 months ago

UPDATE 1-CITIC Pacific Special Steel bucks trend with 50% profit rise

* Bucks wider trend of weakened steel industry

* Seeks new sales in eastern Europe, Southeast Asia, Middle East (Adds detail, background)

BEIJING, March 5 (Reuters) - CITIC Pacific Special Steel Group Co Ltd said on Thursday its net profit rose by 50.5% year on year, boosted by increasing sales, especially in overseas markets, and added it aimed to find more new outlets.

Many steel companies have suffered from higher raw material prices and weak demand, and the economic impact from the coronavirus outbreak may further weaken the sector.

But CITIC Pacific Special Steel, based in the coastal province of Jiangsu, said its net profit had risen by around half to 5.4 billion yuan ($778.74 million) last year.

Revenue rose 0.6% to 72.6 billion yuan compared with a year earlier, according to a filing to the Shenzhen Stock Exchange.

“Amid upgrading trade frictions... (we) will strengthen development of new markets and new clients, especially in eastern Europe, Southeast Asia and the Middle East,” the company said.

It has also approved a project to relocate a unit to China’s eastern Qingdao city, with total investment of 5.0 billion yuan, the company said in a separate filing.

CITIC Pacific Special Steel, which listed on the Shenzhen exchange last October following a reorganisation, had produced 14.09 million tonnes of crude steel in 2019 and exported 1.77 million tonnes abroad, according to the company.

This year, it aims to produce 14.45 million tonnes of steel and sell 1.8 million tonnes to overseas markets, it said.

CITIC Pacific Special Steel is bucking a wider trend by reporting rising profits.

Shanxi Taigang Stainless Steel said in January its 2019 net profit was expected to fall more than 50% year on year, while Fangda Special Steel posted a 41.5% drop in net profits. ($1 = 6.9343 Chinese yuan renminbi) (Reporting by Min Zhang and Colin Qian in Beijing, Meg Shen in Hong Kong; Editing by Alexander Smith and Barbara Lewis)

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