OREANDA-NEWS. June 28, 2013. General Steel Holdings, Inc. ("General Steel" or the "Company") (NYSE: GSI), a leading non-state-owned steel producer in China, announced financial results for the third quarter ended September 30, 2012, fourth quarter of 2012 and full-year ended December 31, 2012.

In conjunction with this announcement, the Company has filed the corresponding Quarterly Report on Form 10-Q for the quarter ended September 30, 2012 and Annual Report on Form 10-K for year ended 2012 ("2012 Annual Report") with the U.S. Securities & Exchange Commission (the "SEC"). Upon the filing of the 2012 Annual Report, the Company has regained compliance with the New York Stock Exchange's ("NYSE") continued listing standards relating to the filing of its 2012 Annual Report.

"We are pleased to have completed the filing of our 2012 Annual Report, and thereby regaining compliance with the NYSE's continued listing requirement that we file our Annual Report," said Henry Yu, Chairman and Chief Executive Officer of General Steel. "Again, I would like to thank our finance team for their diligent efforts in completing these filings and we look forward to soon updating the investment community on our business strategy and development efforts for 2013 and beyond."

"According to the China Iron and Steel Association, 2012 was the most difficult year in the last decade for China's steel industry.  Due to the economic slowdown and an oversupply of inventory, steel prices declined sharply in 2012, and, as a result, more Chinese steel companies suffered net losses in 2012[1].  Given the challenging macro environment, we strategically focused on optimizing and upgrading our production capability and on strengthening our market competitiveness via our geographic advantages in Western China and through cooperation with the government and state-owned enterprises.  Our efforts helped us achieve positive gross profits and narrow net losses for the year. Looking ahead, we remain focused on further strengthening our geographic advantages in Western China, while forging ahead with upgrading our production capability and improving operating efficiency."

[1] Source: Press release distributed by China Iron and Steel Association on February 1, 2013.

Full Year 2012 Financial Review
Revenue decreased 19.6% year-over-year to USD2.9 billion, from USD 3.6 billion in 2011, mainly due to decreased sales volumes as well as a decrease in average selling price of rebar products.

Sales volume totaled approximately 5.3 million metric tons, compared with 6.2 million metric tons in 2011.

Gross profit totaled USD 32.1 million, or 1.1% of revenue, compared with gross loss of USD (88.2) million, or gross margin of negative (2.5%) in 2011.
 
Operating loss for the year improved to USD (73.0) million, compared with an operating loss of USD (180.0) million in 2011.

Net loss attributable to the Company narrowed to USD (152.7) million, or USD (2.78) per diluted share based on 54.9 million weighted average shares outstanding, compared with a net loss of USD (177.2) million, or USD (3.24) per diluted share based on 54.8 million weighted average shares outstanding in 2011.

The decreased net loss in 2012 was primarily attributable to improved gross profit, a decrease in operating loss, offset by an increase of USD 70.5 million in other expenses as compared to the same period of 2012. The increase in other expenses are mainly due to increased finance expanse, which include an increase of USD 15.4 million in interest expense on capital lease, and USD 45.9 million in interest expense on bank borrowings, related parties borrowings, and discounted notes receivables.

Third Quarter 2012 Financial Review

Revenue decreased 28.7% year-over-year to USD 711.4 million, from USD 998.2 million in the third quarter of 2011.

Sales volume totaled approximately 1.4 million metric tons, down from 1.7 million metric tons in the third quarter of 2011.

Gross loss was USD (13.6) million, or negative (1.9%) of revenue, compared with gross profit of USD 34.1 million, or 3.4% of revenue in the third quarter of 2011.

Operating loss for the quarter was USD (36.4) million, compared with an operating income of USD 9.7 million in the third quarter of 2011.

Net loss attributable to the Company was USD (41.6) million, or USD (0.76) per diluted share based on 54.5 million weighted average shares outstanding, compared with a net loss of USD (13.8) million, or USD (0.25) per diluted share based on 55.2 million weighted average shares outstanding in the third quarter of 2011.

Fourth Quarter 2012 Financial Review

Revenue decreased 8.8% year-over-year to USD 723.4 million, from USD 793.5 million in the fourth quarter of 2011.

Sales volume totaled approximately 1.4 million metric tons, compared with 1.6 million metric tons in the fourth quarter of 2011.

Gross profit totaled USD 12.0 million, or 1.7% of revenue, compared with gross loss of USD (150.7) million, or negative (19.0%) of revenue in the fourth quarter of 2011.

Operating loss for the quarter decreased to USD (31.5) million, compared with USD (176.6) million in the fourth quarter of 2011.

Net loss attributable to the Company was USD (49.9) million, or USD (0.91) per diluted share based on 54.9 million weighted average shares outstanding, compared with a net loss of USD (131.5) million, or USD (2.38) per diluted share based on 55.4 million weighted average shares outstanding in the fourth quarter of 2011.

Balance Sheet
As of December 31, 2012, the Company had cash and restricted cash of approximately USD 369.9 million, compared to USD 518.2 million as of December 31, 2011. The Company had an inventory balance of approximately USD 212.7 million as of December 31, 2012, compared to USD 297.7 million as of December 31, 2011. As of December 31, 2012, the Company had total liabilities of approximately USD 3.1 billion.