Japan Major Steels to Post High Level Profit

Nippon Steel, JFE Holdings and Nisshin Steel announced on Thursday they revised the profit outlook upward for the year ending March 2007 from estimates in October 2006. Nippon Steel increased the outlook by 55 billion yen to 580 billion yen for consolidated recurring profit. JFE Holdings increased the outlook by 10 billion yen to 500 billion yen. Nisshin Steel increased the outlook by 10 billion yen. Kobe Steel kept the outlook at 170 billion yen. Nippon Steel and Sumitomo Metal Industries, which already announced the outlook with 300 billion yen of recurring profit in late January, will renew the record profit with higher valuation profit in previous year. JFE Holdings and Kobe Steel will post the record level profit. They improve the profitability with higher selling price and volume under growing demand for high valued steel products. Nippon Steel increases the distribution of annual dividend by 1 yen to 10 yen per share and JFE Holdings increases dividend by 20 yen to 120 yen per share. Kobe Steel and Nisshin Steel increase the dividend by 1 yen to 7 yen per share. Nippon Steel will post 32.6 billion yen higher consolidated recurring profit for the year ending March 2008 from previous year by 115 billion yen of gain from steel business despite of 83 billion yen of negative impact compared with inventory profit in previous year. Without the inventory gain, the profit increases by 18% substantially. Vice president Nobuyoshi Fujiwara said the firm revised the outlook upward due to higher shipment supported by alliance partners and higher selling price. Usiminas, which Nippon Steel combined as equity method affiliate, will provide around 5 billion yen of positive impact and Nippon Steel will post 7 billion yen higher recurring profit from steel subsidiaries and affiliates. JFE Holdings’ steel unit will post 22.8 billion yen lower consolidated recurring profit for the year ending March 2007 from previous year. The unit expects 30 billion yen of negative impact from higher raw materials cost including zinc and 43 billion yen of negative factor compared with inventory gain in previous year despite of positive 40 billion yen from price and volume and 32 billion yen from cost cutting. The engineering unit increases the profit by 3.1 billion yen and urban development unit will post 800 million yen higher profit. Kobe Steel will post same level of consolidated recurring profit for the year ending March 2007 as record in previous year. The firm covered 19 billion yen of higher raw materials cost by 21.5 billion yen of gain from higher price and volume. The steel unit will post 96 billion yen of operating profit while the other units also secure favorable operating profit at 31 billion yen for aluminium and copper, 19 billion yen for machinery, 14 billion yen for construction machinery and 14 billion yen for electronic materials & other businesses. Nisshin Steel will also post high level of 57 billion yen of consolidated recurring profit for the year ending March 2007 from previous year. The firm covers 50 billion yen of higher raw materials cost including nickel, zinc and iron ore through 49 billion yen of gain from higher selling price and volume. The Chinese stainless cold rolling joint venture, Ningbo Baoxin Stainless Steel posted 3 billion yen of recurring profit and the US coating steel joint venture, Wheeling-Nisshin posted 3.5 billion yen of recurring profit.