The board of directors of Shougang Concord International Enterprises Co. Ltd. announced that, based on the unaudited consolidated management accounts of the company for ten months ended October 31, 2012, the results of the Group for the year ending December 31, 2012 is expected to decline significantly as compared with that for the year 2011. Should there be no strong recovery in the remaining two months to December 31, 2012 from the tough situation in the first ten months of the year, it is expected that the Group will record a consolidated loss attributable to owners of the Company for the year ended 31 December 2012.

The Group recorded a consolidated profit attributable to owners of the Company of HKD 152,252,000 for the year 2011. Such adverse changes are primarily attributable to the following factors: as disclosed in the 2011 annual report of the Company, the Group recorded fair value gains of HKD 324,000,000 on iron ore offtake contracts and HKD 108,000,000 on acquisition of interest in Shougang Fushan Resources Group Limited. No such similar gains are expected for the year ending December 31, 2012; and as disclosed in the profit warning announcement of the Company dated July 31, 2012 and the 2012 interim report of the Company, the selling price of the Group's steel products dropped significantly in the first half of 2012 due to weak market demand for the steel products under the sluggish economic conditions.

Besides, the persistently high raw material cost adversely affected the Group's core business of steel manufacturing. For the four months ended October 31, 2012, the selling price of the Group's steel products further declined as a result of the persistent weakness in the steel industry. Upward pressure of raw materials price and labour cost also eroded the gross profit margin of the Group.

The Group will strive to maintain its competitiveness through continuous improvement in production efficiency and reduction of production costs.