Japan Major 5 Steels to Post Quarterly Loss

Japanese major 5 steel makers expect quarterly consolidated recurring loss for January-March when they plan major production cut to meet very slow steel demand under worldwide slow economy. They revised the outlook downward by Wednesday to post much lower recurring profit for fiscal 2008 ending March 2009 from fiscal 2007 while Nippon Steel, JFE Holdings, Sumitomo Metal Industries and Kobe Steel revised the annual outlook upward as of October 2008.

Nippon Steel expects the consolidated recurring profit will decrease by 36.2% to 360 billion yen for fiscal 2008, which is 200 billion lower than former outlook. Lower shipment volume and worsening results of stainless and other subsidiary impact on the profit. The firm expects around 50 billion yen of recurring loss for January-March.

JFE Holdings expects 370 billion yen of consolidated recurring profit for fiscal 2008, which is 26.4% lower than fiscal 2007 and 130 billion lower than former outlook. The firm expects 10.5 billion yen of recurring loss for January-March due to loss from shipbuilding unit while the steel unit is breakeven.

Sumitomo Metals expects 215 billion yen of consolidated recurring profit for fiscal 2008, which is 27.9% lower than fiscal 2007 and 85 billion yen lower than former outlook. The firm will post 7.8 billion yen of recurring loss for January-March due to severe business condition.

Kobe Steel expects 71 billion yen of consolidated recurring profit for fiscal 2008, which is 55% lower than fiscal 2007 and 89 billion yen lower than former outlook. The firm expects 33.4 billion yen of recurring loss due to major steel production cut and loss for aluminium and copper unit.

Nisshin Steel expects 7 billion yen of recurring profit for fiscal 2008, which is 87.2% lower than fiscal 2007 and 24 billion yen lower than former outlook, while the firm already revised the outlook downward in October. The firm expects 15.2 billion yen of recurring loss for January-March due to major production cut.

They expect major net profit decrease for fiscal 2008 from fiscal 2007 when they expect major valuation loss for securities under plunging stock market. Sumitomo Metals plans 5 yen per share of yearend dividend as last year while Nisshin Steel reduces the yearend dividend to 3 yen from 6 yen last year. Nippon Steel and JFE Holdings postponed the dividend announcement while Kobe Steel decided not to distribute yearend dividend.