OREANDA-NEWS. October 04, 2012. General Steel Holdings, Inc. ("General Steel" or the "Company") (NYSE: GSI), one of China's leading non-state-owned producers of steel products and aggregators of domestic steel, announced select preliminary financial results for the first half of 2012 and provided an update on its operations and strategic initiatives. For the first half of 2012, General Steel expects to report revenues of approximately USD1.4 billion and production volume of approximately 2.4 million metric tons, reported the press-centre of General Steel.

"While the nationwide steel market has slowed, demand in our primary target market of Western China has remained stable, supported by large-scale, government-sponsored housing and infrastructure investment projects," said Mr. Henry Yu, General Steel Chairman and Chief Executive Officer. "Our sales and volume momentum remains strong and continues to grow as Shaanxi Province and the nearby areas initiate new infrastructure projects that have been recently approved by the National Development and Reform Commission. Situated in Shaanxi, we believe our Longmen JV presents a highly capable, geographically desirable partner for these upcoming projects, and we believe we are well positioned to capture new growth opportunities as we extend our presence in this rapidly developing region.  Our expanded Unified Management Agreement with Shaanxi Steel and Shaanxi Coal, is creating additional advantages by improving our raw material procurement and direct sales capabilities and further strengthening our market position."

"Expanding our direct sales channel and securing new contracts have been among our primary areas of focus. In the first half of the year, we have increased cooperation with large state-owned-enterprises through direct sales contracts. We are simultaneously maintaining tight expense controls, scaling production at Longmen JV, improving our product-mix and achieving additional operating efficiencies to mitigate market challenges and pricing pressure. While the cost of both iron ore and other raw materials for steel products remains volatile, we expect to offset pricing fluctuations based on our strategic cost reduction and efficiency improvement initiatives. Under our benchmarking program, we are improving our raw materials procurement capabilities, reducing transportation costs for securing coke, and upgrading equipment with state-of-the-art technology," Mr. Yu concluded.

"While we focus on implementing our strategic operating efficiency initiatives, we continue upholding the highest standards of internal controls and accounting policies," said John Chen, Chief Financial Officer of General Steel.

"In August, we successfully completed restatement of 2009, 2010 and first quarter 2011 financial results. We view the completion of these restatements as an important step forward for our Company. We are now focused on completing the audit process and SEC filings for our outstanding financial statements. We look forward to completing this process and returning to a regular financial reporting schedule as soon as possible," stated Mr. Chen.

Recent Operational Highlights
Completed the first stage of a series of benchmarking programs, which have resulted in efficiency improvements and cost reduction at Longmen JV.

Initiated construction on a state-of-the-art, 900,000 metric ton seismic-grade rebar production line at Longmen JV.  The production line incorporates cutting-edge technology that is expected to reduce rebar production costs substantially. The added capacity will also improve margins and enable the Company to better address demand for seismic-grade rebar in Western China.

Currently Longmen JV is sourcing coke from a 5 million metric ton coke plant adjacent to Longmen JV, which was built by Shaanxi Coal and Chemical Industry Group Co., Ltd., one of the parties in the unified management agreement. General Steel expects the construction of a conveyor belt that will feed the coke directly to its Longmen JV to be completed in October and further reduce transportation costs.

Update on Filings
On August 30, 2012, General Steel completed filing its amended annual report on Form 10-K/A for the year ended December 31, 2010 and amended quarterly reports on Form 10-Q/A for the quarters ended June 30, 2010, September 30, 2010 and March 31, 2011 with the U.S. Securities and Exchange Commission ("SEC").

With these restatements complete, the Company is working diligently with its independent registered public accountant, PricewaterhouseCoopers Zhong Tian CPAs Limited Company ("PwC") on the audit process for its outstanding financial statements for 2011.  Currently, the Company is finalizing its quarterly report on Form 10-Q for the period ended June 30, 2011, while simultaneously working on the quarterly report on Form 10-Q for the period ended September 30, 2011 and its Annual Report on Form 10-K for the year ended December 31, 2011. These reports are expected to be released in a sequential order.

Following the completion of these filings, General Steel will file its quarterly reports with the SEC on Form 10-Q for the periods ended March 31 and June 30, 2012 as soon as possible.