JFE Posted Record Profit at 517.3 billion yen for F2005

JFE Holdings announced on Thursday the consolidated recurring profit increased by 12.3% to record 517.3 billion yen for fiscal 2005 ended March 2006 from former record fiscal 2004. The profit was 17 billion yen higher than original plan due to higher steel selling price, better products mix and cost down though the steel output decreased from the plan to reduce commodity grade export and domestic sheet inventory. The firm will increase the distribution of dividend by 55 yen to 100 yen per share for the end of the period. The firm estimates the recurring profit is 460 billion yen for fiscal 2006 due to lower averaged selling price based on the current price, smaller inventory valuation profit and unfavorable foreign exchange rate despite of cost down and higher sales volume. The firm expects the consolidated sales increases by 0.7% to 3.12 trillion yen for fiscal 2006 from fiscal 2005. The unconsolidated raw steel output will increase by 2 million tonnes from 26.72 million tonnes in fiscal 2005. The firm increases the commodity grade output by 1.5 million tonnes from output reduction and increases the high-valued products sales by 500,000 tonnes. The steel unit’s consolidated recurring profit will decreased by 65.7 billion yen to 445 billion yen for fiscal 2006 from fiscal 2005. The firm expects 55 billion yen of negative impact from lower selling price based on export price in January-March, negative 26 billion yen from lower inventory valuation profit and negative 10 billion yen from unfavorable foreign exchange rate while the firm tries to reduce the cost by 30 billion yen. The firm estimates the outlook based on the only selling price change, which the firm is sure so far. The engineering unit posted 900 million yen of consolidated recurring profit for fiscal 2005 under shut out from public tender for bridge and higher materials cost. The unit expects the profit increases to 7 billion yen for fiscal 2006 by improving profitability under the restructuring of business area and by reducing fixed cost by 6.1 billion yen. The firm tries to distribute more than 100 yen per share in fiscal 2006 and will distribute dividend in the mid-term.