Tokyo Steel’s Profit to Hit 50B Yen through F2008

Tokyo Steel Manufacturing announced on Friday the firm revised up the non-consolidated recurring profit estimation for fiscal 2008 (Apr08-Mar09) to 50 billion yen, up by about 3 times from the previous fiscal year and by 20.5 billion yen from the previous estimation. The firm raised the profit forecast for F2008 when the price gap expanded between the products and ferrous scrap due to sharp downturn of ferrous scrap market after the end of July. The firm forecasts the average purchase price of ferrous scrap would be over 30,000 yen per tonne in the last half of F2008 and the return on sales could increase to 16.8% from 7%.

The revenue estimation was revised up to 298 billion yen for F2008, which would up by 21.7% from F2007 and hit the record high. The firm estimates the operating profit could triple to 47.5 billion yen. The net profit is expected to expand by 2.8 times to 29 billion yen.

The firm posted 17.08 billion yen of sales in the first half of F2008, up by 44.5% from the corresponding period of F2007. The operating profit was 51.7% higher year-on-year at 17.3 billion yen, the recurring profit 54.2% higher at 19 billion yen and the net profit 48.9% higher at 11.2 billion yen. The revenue hit the record high thanks to the upsurge of the product prices. The profit growth was due to lower ferrous scrap price.

Total selling volume decreased by 9,000 tonnes to 1.604 million tonnes for 1H year-on-year. The export volume decreased by 73,000 tonnes to 226,000 tonnes. The firm forecasts the total selling volume would be 1.35 million tonnes during 2H and 2.95 million tonnes through F2008. The averaged steel selling price increased by 33,200 yen or 45.3% to 106,500 yen per tonne in 1H year-on-year. The averaged export price surged by 41,500 yen or 54.6% to 117,500 yen per tonne.