Japan 5 Major Steels to Post Record Profit for F2005

Japanese 5 integrated steel makers will post record consolidated recurring profit for the year to March 2006 after the record profit for the previous year, according to the estimates announced by the makers on Thursday. Their steel businesses keep making big profit due to firm demand for high-grade steel products and higher selling price. Nippon Steel revised the estimate upward by 20 billion yen to 515 billion yen from estimate as of announcement of the half year results. JFE Holdings keeps the estimate at 500 billion yen. Sumitomo Metal Industries increased the estimate by 10 billion yen to 260 billion yen and Kobe Steel also increased the estimate by 5 billion yen to 170 billion yen. Nisshin Steel revised the estimate slightly upward to 62 billion yen from that announced on February 2. The debt equity ratio, which is interest bearing debt for equity, decreases to less than 100% at the end of March 2006 decreasing to 73% for Nippon Steel, to 96% for JFE and to 99% for Sumitomo Metals. Kobe Steel’s debt equity ratio decreases to around 130% excluding project finance. They increase the distribution of dividend. JFE will increase the year-end dividend by 55 yen to 100 yen per share for the year to March 2006 from previous year. Sumitomo Metals increases the yearly dividend by 2 yen to 7 yen including 4.5 yen of year-end dividend. Kobe Steel doubles the dividend to 6 yen. Nisshin Steel increases the year-dividend from 5 yen to 6 yen including 3 yen of year-end dividend. Nippon Steel is likely to increase the dividend from 5 yen for previous year though the firm will decide how much the firm distributes after March-end based on the policy to distribute 15-20% of the profit. Nippon Steel will post 143.6 billion yen higher consolidated recurring profit for the year to March 2006 from previous year. The steel unit increases the profit by 133 billion yen. The parent company’s steel business increases the profit by 119 billion yen due to 310 billion yen higher profit from selling price and products mix despite of 280 billion yen higher cost of raw materials and freight. JFE’s steel business improves the recurring profit by 49.7 billion yen to 500 billion yen for the year to March 2006 from previous year due to 246 billion yen higher profit from selling price, volume and products mix despite of 245 billion yen higher raw materials cost. Sumitomo Metals improves the consolidated recurring profit by 86.8 billion yen for the year to March 2006 from previous year due to 201.3 billion yen higher profit from selling price, volume and products mix despite of 132 billion yen of higher cost of raw materials. Kobe Steel increases the consolidated recurring profit by 54 billion yen for the year to March 2006 from previous year due to 100.5 billion yen higher profit from selling price, volume and products mix despite of 76 billion yen higher cost of steel raw materials. Nisshin Steel increases the parent company’s recurring profit by 11.3 billion yen for the year to March 2006 from previous year due to 50 billion yen higher profit from selling price, volume and products mix despite of 40 billion yen higher raw materials cost.