Nippon Steel to Post Favorable Recurring Profit through F2006

Nobuyoshi Fujiwara, vice president of Nippon Steel Corporation, explained finance strategy of the firm in an interview with Japan Metal Bulletin. Nippon Steel revised earnings estimates for the first half of fiscal 2006 ending September along which the consolidated recurring profit would increase to 250 billion yen from 220 billion yen originally expected. Mr. Fujiwara explained the firm revised up the estimates because steel demand keeps increasing for domestic manufacturing industries this year and Asian steel market recovered earlier than expected from slower condition.The firm estimates the consolidated recurring profit could increase by 10 billion yen in the last half of fiscal 2006 to March 2007 from the first half. Mr. Fujiwara expects world economy keeps the brisk tone and the steel demand follows the strong trend in the first half of 2006, while concerned about the slow down of American economy and the overheating steel production in China. He said the firm can gain proper sales to catch the high-grade steel demand in which the firm specializes and to follow Asian market trend accurately. He explained the firm revised up the estimate for consolidated recurring profit by 40 billion yen to 500 billion yen in full business year due to the improvement of the selling price mainly for domestic large users such as automobile makers or shipbuilders in half year to March 2007 and the sales increase in volume mainly for high-grade steel products.He forecasts the firm could increase the sales volume of high-grade steels by about 1.5 million tonnes in the last half of fiscal 2006 compared with the fist half. The firm plans to increase the sales volume of high-grade steels by 3 million tonnes during 3 years to March 2007. He said the firm could achieve the half of the target in fiscal 2006.He expects that the firm produces the crude steel at about 15.7 million tonnes in the first half of fiscal 2006, and at the same level in the last half from the first half. In the first half of fiscal 2006, the upstream production was disorder. In the last half of fiscal 2006, the disorder of the upstream production would resolve, but the production decreases by the refining of Nagoya Iron Works.He explained the firm decided the midterm dividend in 14 years at 4 yen per share because the firm became to be able to ensure a high profit and the shareholders which are at below 500,000 peoples need the midterm dividend strongly.