Tokyo Steel Expects Breakeven for F2011

Tokyo Steel Manufacturing announced on Tuesday the firm expects zero yen of recurring profit for fiscal 2011 ending March 2012 compared with 3 billion yen of profit in previous outlook and 9.095 billion yen of loss in fiscal 2010. The firm revised the outlook downward but tries to cancel major loss in the first half through higher sales volume with adjusted price level in the second half.

The firm expects the profit will increase by 6 billion yen in second half from the first half mainly due to wider margin under lower ferrous scrap cost while the sales volume and selling price would be lower than expected before.

The firm now expects zero yen of operating profit and zero yen of net profit with 186.5 billion yen of sales in fiscal 2011 compared with 3 billion yen and 2 billion yen of each profit with 202 billion yen of sales in previous outlook.

The firm posted 3.416 billion yen of recurring loss in the first half compared with 1.54 billion yen of loss in the same period of fiscal 2010 while the sales increased by 12.6% to 89.196 billion yen. The firm reported the steel selling price decreased and the cost increased more than expected while foreign exchange loss also impacted on the results. The operating loss was 3.296 billion yen and the net loss was 3.35 billion yen while the loss was 1.516 billion yen and 2.485 billion yen each in same period of 2010.

The firm decided 3 yen per share of dividend for the mid-term period compared with 5 yen a year earlier and expects 6 yen dividend for the full year compared with 8 yen in fiscal 2010.

The steel selling rice decreased by 2,000 yen to 71,800 yen per tonne in the first half from same period of fiscal 2010 while the scrap purchase price increased by 2,500 yen to 38,000 yen. The steel products production increased by 123,000 tonnes to 1.276 million tonnes including 170,000 tonnes at Tahara plant. The steel sales volume increased to 1.238 million tonnes from 1.133 million tonnes and the export increased to 63,000 tonnes from 62,000 tonnes. The export rate was 4.5% of total sales value compared with 4.8% in same period of fiscal 2010.

The firm expects 1.45 million tonnes of steel sales volume in second half, which is 100,000 tonnes lower than original plan. The firm expects 67,000 yen per tonne of steel selling price and 31,000 yen of scrap cost. The firm plans 2.7 million tonnes of steel products production, which is 100,000 tonnes lower than original plan. The output at Tahara is 440,000 tonnes, which is 310,000 tonnes lower than the plan.