Net profit at Baoshan Iron & Steel Co, or Baosteel, surged 39.98 percent year-on-year in 2012 as the firm sold some of its assets amid falling profitability in the steel sector, the company announced Thursday.

In 2012, Baosteel reaped a net profit of 10.31 billion yuan ($1.64 billion), while its total profit increased 41.81 percent, or 3.87 billion yuan from a year ago, the company said in a preliminary yearly report filed to the Shanghai Stock Exchange.

During the year, the operating profit of this China's biggest steel maker based in Shanghai declined as it suffered falling gross margins due to weaker steel demand and a high price of iron ore. The company sold its stainless and special steel businesses.

The steel maker's revenues also slipped 14.08 percent from 2011 to 191.47 billion yuan in 2012, according to its statement.

The company said its total assets shrank slightly during the report period but that its financial structure remained stable, with a debt-to-assets ratio below 50 percent by the end of 2012.

The company also reported its earnings per share, which stands at 0.59 yuan.