OREANDA-NEWS. February 21, 2013. 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 companies, today announced that it has filed its Annual Report on Form 10-K for the year ended December 31, 2011 with the U.S. Securities and Exchange Commission (the "SEC"). The Company's independent registered public accounting firm, Friedman LLP has expressed an unqualified audit opinion on the Company's annual financial statement for the 12 months ended December 31, 2011, reported the press-centre of General Steel.

With the filing of this Annual Report on Form 10-K, the Company believes it has met the New York Stock Exchange's ("NYSE") extended deadline and expects to regain compliance with the NYSE's continued listing requirement for annual report filings under Section 802.01E of the NYSE Listed Company Manual.

"The filing of our 2011 Annual Report demonstrates our commitment to proper financial reporting, and is the result of a concerted effort by our finance team and audit firm partners. Although the review and audit process for our 2011 financial statements took much longer than originally anticipated, we are pleased that we will regain compliance with the NYSE's Annual Report listing requirements," said Henry Yu, Chairman and Chief Executive Officer of General Steel. "Moving ahead, we will continue to focus on our business while we work diligently to prepare our 2012 financial statements and bring General Steel fully current in its SEC filing obligations. Again, I would like to thank our team for their tremendous work and dedication to completing this process, as well as our shareholders for their ongoing support of the Company."

Full Year 2011 Financial Review
Total crude steel production capacity under management was 7.0 million metric tons per annum as of December 31, 2011.

Total sales increased 89.4% year-over-year to USD 3.6 billion, from USD 1.9 billion in 2010. The increase was attributable to both higher sales volume and increased average selling prices.

Sales volume for the year totaled 6.2 million metric tons, an increase of 2.3 million metric tons, or 58.1%, compared to 3.9 million metric tons in 2010, with an average selling price for rebar of USD 635 per ton in 2011, compared to USD 526 per ton in 2010.

Gross loss was USD (88.2) million, representing a gross margin of (2.5)%, compared with gross profit of USD 31.4 million, or a gross margin of 1.7% in 2010. The gross loss in 2011 was mainly attributable to a sharp increase in the cost of iron ore and coke, the Company's primary raw materials, in the fourth quarter.

Selling, general and administrative expenses totaled USD 91.8 million, compared with USD 52.6 million in 2010. This increase was mainly related to operational expansion and an increase in production and shipping volume, which led to an increase in transportation and sales agent charges.

Loss from operations totaled USD (180.0) million, compared with a loss from operations of USD (21.2) million in 2010.

Finance expenses for the year ended December 31, 2011 increased to USD 115.0 million, compared with USD 51.3 million in the year-ago period. The increase was primarily due to USD 27.7 million of non-cash capital financing costs, and a USD 36.0 million increase in interest expense from increased bank borrowings.

Net loss attributable to the Company was USD (177.2) million, or USD (3.24) per diluted share, compared with a net loss of USD (30.0) million, or USD (0.56) per diluted share in 2010. The year-over-year increase in net loss was primarily related to the negative gross margin resulting from the fourth quarter raw material price increases, an increase of USD 36.4 million in inventory impairment, an increase of USD 39.3 million in operating expenses from expanded operations and higher production and shipping volume, as well as an increase of USD 63.7 million in finance expenses from increased capital lease and interest expense on bank borrowings.  In addition, the Company determined that the net operating loss carryforward may not have been fully realizable in the second quarter of 2011 and provided 100% allowance charges of \\$15.4 of deferred tax assets carried over from 2010.

Fourth Quarter 2011 Financial Review
Total sales increased 69.9% year-over-year to USD 793.5 million, compared with USD 467.2 million in the fourth quarter of 2010. The increase was attributable to both higher sales volume and increased average selling prices.

Sales volume for the fourth quarter of 2011 totaled 1.6 million metric tons, an increase of 0.7 million metric tons, or 77.8%, compared to 0.9 million metric tons in the fourth quarter of 2010.

Gross loss was USD (150.7) million, representing a gross margin loss of (19.0)%, compared with gross profit of USD 4.7 million, or a gross margin of 1.0% in the fourth quarter of 2010. The gross loss in the fourth quarter of 2011 was mainly attributable to a year-over-year increase in the cost of iron ore and coke, the Company's primary raw materials, that exceeded the increase in the average selling price of the Company's products.

Selling, general and administrative expenses totaled USD 26.0 million, compared with USD 17.2 million in the fourth quarter of 2010. This increase was mainly related to operational expansion and increased production and shipping volume, which led to an increase in transportation and sales agent charges.

Loss from operations totaled USD (176.6) million, compared with a loss from operations of USD (12.5) million in the fourth quarter of 2010.

Finance expenses for the quarter ended December 31, 2011 increased to \\$42.6 million, compared with USD 13.7 million in the year-ago period. The increase was primarily related to \\$18.6 million of non-cash capital financing costs, and a USD 10.4 million increase in interest expense from increased bank borrowings.

Net loss attributable to the Company was USD (131.5) million, or USD (2.38) per diluted share, compared with a net loss of USD (18.6) million, or USD (0.34) per diluted share in the fourth quarter of 2010. The year-over-year increase in net loss was primarily related to the negative gross margin resulting from raw material price increases, as well as an increase of USD 36.4 million in inventory impairment, an increase of USD 8.8 million in operating expenses from expanded operations and higher production and shipping volume and an increase of USD 29.0 million in finance expenses from increased capital lease and interest expense on bank borrowings.

Balance Sheet
As of December 31, 2011, General Steel had cash and restricted cash of approximately USD 518.2 million, compared to USD 263.1 million as of December 31, 2010. The Company had an inventory balance of approximately USD 297.7 million as of December 31, 2011, compared to USD 453.6 million as of December 31, 2010. As of December 31, 2011, the Company had total liabilities of approximately USD 3.2 billion, compared to USD 1.7 billion as of December 31, 2010.

About General Steel Holdings, Inc.
General Steel Holdings, Inc., (NYSE: GSI), headquartered in Beijing, China, operates a diverse portfolio of Chinese steel companies. With 7 million metric tons of crude steel production capacity under management, its subsidiaries serve various industries and produce a variety of steel products including rebar, high-speed wire and spiral-weld pipe. General Steel Holdings, Inc. has steel operations in Shaanxi and Guangdong provinces, Inner Mongolia Autonomous Region and Tianjin municipality. For more information, please visit www.gshi-steel.com.

To be added to the General Steel email list to receive Company news, or to request a hard copy of the Company's Annual Report on Form 10-K, please send your request to generalsteel@tpg-ir.com.