Nisshin Steel Posts 57% Lower Profit for April-June

Nisshin Steel announced on Friday the consolidated recurring profit decreased by 56.5% to 7.991 billion yen for April-June from same period of 2005 due to higher raw materials and energy cost, accounting change for depreciation and lower profit from offshore subsidiaries. The firm keeps the original financial target for the year after the April-June results was in line with the original outlook. The consolidated sales increased by 0.5% to 144.275 billion yen for April-June from same period of 2005 due to higher selling price despite of slightly lower sales volume. The net profit decreased by 52.6% to 4.578 billion yen. The 10.4 billion yen of lower recurring profit for April-June from same period of 2005 was from 4.5 billion yen of higher zinc and raw materials and energy cost, 2.5 billion yen of unfavorable foreign exchange rate impact, 5.4 billion yen of negative impact due to change of depreciation method, difference of inventory value and lower profit of offshore subsidiaries though the higher price increased the profit by 2 billion yen. The US sheet coating subsidiary, Wheeling-Nisshin and Chinese stainless sheet joint venture, Ningbo Baoxin Stainless Steel posted lower profit. Nisshin Steel reduced the raw steel output by 1.6% to 995,000 tonnes in April-June from same period of 2005. The firm keeps the outlook at 17 billion yen of consolidated recurring profit for the half year to September and 40 billion yen for the full year, which the firm announced in May. The firm tries to pass the accelerating higher raw materials and energy cost on the selling price in and after July-September.