In the second quarter, Baowu Group seized the beneficial opportunity of the steel market, the profits kept on growing continuously, the main operational indicators are completed earlier than schedule, the operating performance was significantly better than the same period last year. In the first half year, Baowu Group cumulative realized profit of 8.66 billion yuan, operating profits continue to maintain the first in the industry. The information obtained from the working meeting in the second quarter of Baowu Group held on July 20. Ma Guoqiang, Chen Derong, Fu Zhongzhe, Hu Wangming, Dai Zhihao, Zou jixin, Liu Xiang, Guo Bin, Zhang Jingang and other leaders attended the meeting or participated by video.
At the meeting, the security department, the ministry of energy and environment, the finance department and human resources department of Group Company respectively made special project work report. Iron and Steel Industry Development Center, Service Industry Development Center, Urban New Industry Development Center, Industrial Finance Development Center, Baosteel, Wuhan Iron and Steel Group made managerial report respectively, which is focus on the completion of operating performance, the completion of business plan and the key work of the next stage, etc.
In the first half year, being driven by the policy of Baowu joint and promote supply-side structural reform advance by the Party Central Committee and State Council, under the general background of macroeconomic stabilization and market environment improving, managers at all levels and all the staff of Baowu Group gripped profitable opportunity of recovering market, up and down with the same desire, work hard, we have achieved good results in production, management, integration, reform and transformation, etc. Among them, the Group Company's business performance improved significantly, and achieved the goal of beating the market and surpassing ourselves: crude steel production increased by 11.5% year on year, operating revenue increased by 61% year on year, the profit doubled from a year ago. Group Company's personnel efficiency increased by 4.3%, ton of steel per capita increased by 22% year on year, per capita operating income and per capita profit increased by 74% and 111% respectively. The integrated synergy effect of Baowu has achieved initial success.
The steel industry development center pointed out, the iron and steel sector sold 57% of its annual budget for the first half of the year, profits were completed 83% of annual budget. Profit ratio of sales of iron and steel sector is 5%, is superior to the industry average level, overall beat the market. EVA was changed from negative to positive for iron and steel sector in the first half year, realized a sharp rise. The service industry development center believes, the overall EVA of the service sector was significantly improved, and the first half year was positive; overall operating cash flow improved significantly from the first quarter, cash outflow turned into cash inflow; total profits are increased compared to last year, 53% of the annual target has been completed. Urban new industrial development center promoted its revenue in the second quarter compared to the previous quarter, total profit, EVA and other indicators increased significantly year-on-year, and the operating cash flow continued to improve. Industrial finance development center completed its annual target value in the first half year, the scale of assets under management were promoted.
In the first half year, Baosteel production and marketing links were stable, the change of cost kept stable, the profitability hit a seven-year high, "Two Gold" controls achieved stage results, reform and development process were under controlled. It is worth mentioning that Baosteel promoted "100-day Plan" of Baowu integration, the improvement of integrated synergistic efficiency achieved remarkable results. Baowu Group according to "Focus Outward, Operational Growth, Value Creation", focused on expanding the market outwards, empowered barrier cleaning and vigor motivating, went forward for reform, took a step for new industries, great progress has been made in management, the profit realized 580 million yuan in the first half year, increased 225 million yuan from a year earlier, finished annual target ahead of schedule. The main indicator was higher than the GDP growth, the results exceeded ourself, beat the market.
Ma Guoqiang, Baowu Group party secretary and chairman, delivered the spirit of the speech by vice premier Ma Kai on the national enterprise reform experience exchange meeting and the spirit of the responsible person training class meeting of the central enterprises and local governments held by State-owned Assets Supervision and Administration Commission of the State Council. He asked all units to conscientiously implement the spirit of the two meetings, and in accordance with the requirements of SASAC, the second half year should be focus on the following key tasks: strive to complete production and business objectives and strive to create the best performance; make solid progress in reform and make breakthroughs in key areas and key links as soon as possible; continue to push forward supply-side structural reform, firmly win the fight against the quality and efficiency of "Tough Fight of Improving Quality and Efficiency"; play a strategic leading role and continuously enhance the profitability of enterprise core business; accelerate innovation and development, actively foster new drivers of growth; firmly grasp the location of responsibility, accelerate the transformation of government functions. Regarding to the work of Baowu Group in the second half year, Ma Guoqiang stressed five points. First, we should pay special attention to safety production, attach importance to stability, and greet the party's 19th victory with good state and excellent results. Second, pay attention to the cash flow and the "Two Gold" occupation situation. Third, we should unify the thought, seize the opportune moment, and do the optimization of human resources. All units should proceed from the overall situation of Baowu Group, strengthen internal coordination, strengthen staff management, and strictly control external personnel. The Group Company established a target of 8% annual increase in personnel efficiency, and the management staff's compression ratio shall be bigger than this target. Fourth, we need to increase our efforts to reduce corporate and disposal of zombie enterprises. The units should unswervingly eliminate loss-making enterprises and do something in the disposal of the zombies and special difficulty enterprises. Fifth, we need to accelerate reform of state-owned enterprises, and "Three Supply and One Industry" should be fully resolved by the end of this year.
Chen Derong, Baowu Group general manager and deputy party secretary, host the meeting, he asked the units to deeply understand the spirit of the meeting and earnestly implement the work. Chen Derong pointed out, in the next stage of work, we need to further deepen our understanding, combine the work of deficits eliminating and profits increasing, pressure reducing and improvement of the personnel efficiency, the pressure reducing work should be focus on the loss-making enterprise, especially for the enterprises continuous deficit more than 3 years and non-strategic development enterprises, "if the enterprise does not eliminate losses, it will eliminate the loss-making enterprises". The improvement of personnel efficiency is no only a matter of reducing staff, enterprises in the strategic development period should be more responsible for the job transfer of employees, and should be assume corporate social responsibility. The Group Company is making a new round of strategic planning, Baowu Group is to become the leading enterprise group of the global steel industry and top-ranking enterprise group, except for the main business of iron and steel, to form several hundred billion level of revenue, 10 billion level of profit and 10 billion level of revenue, a billion level of profit enterprise, the units should plan and implement the work of the second half year in combination with a new round of development goals. In order to further deepen reform efforts, the Group has adopted the implementation of three institutional reforms, will fully implement the tenure management responsibility system, implement the post performance, the excess profit sharing mechanism and the new organization performance appraisal system, which reflect the performance guidance of "Beat Market, Beyond Ourself, Pursue Excellence".
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