Shanghai-listed Baosteel, or Baoshan Iron and Steel, saw its net profit rising 18.2 percent to 9.645 billion yuan (1.41 billion US dollars) in the first half of the year, the company reported on Friday.

Earnings per share for China's biggest steel maker was 0.55 yuan, its interim report showed.

The half-year revenue amounted to 103.6 billion yuan, up 10.11 percent year on year.

Operating cash flow, however, declined by 5.54 billion yuan to 2.77 billion yuan in the January to June period, a result of soaring costs.

Despite the increasing prices of raw materials such as coking coal and iron ore, the company still made greater profit due to the marked-up sales price of steel and the efforts to cut energy costs. This was achieved by further applying new technologies and improving the product structure, the steel maker said on its website.

The company is still faced with many market uncertainties in the second half. These include pressure from a tight supply and degraded quality of coal, the rising price of iron ore and a possible decline in demand growth, according to the company.

The expected annual revenue of Baosteel in 2008 was 200 billion yuan, of which 51.82 percent had already been achieved in the first six months.

(Xinhua News Agency August 29, 2008)