JFE Holdings announced on Wednesday the firm reviewed its full-year consolidated recurring profit forecast downward to 100 billion yen for fiscal 2011 ending in March 2012. Recurring profit would decrease by 39.7% from fiscal 2010. Mr. Yoshio Ishikawa, vice president of JFE Holdings, explained steel supply is easing in Asian market and flood in Thailand is negatively affecting Japanese manufacturing industry while domestic steel demand trend is unclear. Thus steel selling price maintains low level and the market recovery is delayed, he said.
In the first half of fiscal 2011 (April-September 2011), consolidated recurring profit was 50.6 billion yen, minus by 51.8% from the same period of fiscal 2010. The firm posted consolidated net loss in the first half year mainly due to 94 billion yen of extraordinary loss for revaluation of investment securities. This is the first net loss in the first half year since fiscal 2009. JFE Holdings accelerates profitability recovery by cost reduction and other measures. Based on the financial results, the firm formally decided payment of interim dividend of 10 yen per share at the end of September, lower by 10 yen compared with a year earlier. Payment of year-end dividend will rely on second-half-year financial results. Steel business unit posted recurring profit at 37.7 billion yen for April-September, year-to-year minus by 57.2% or by 50.3 billion yen. The profit increased year-to-year by 35 billion yen due to cost reduction, by 100 billion yen thanks to sales volume increase and price improvement, and by 15 billion yen for inventory evaluation profit. Meanwhile, the profit worsened by 200 billion yen due to cost upsurge for raw materials. Full-year non-consolidated crude steel output plan was unchanged at approximately 28 million tonnes as well as steel product shipment plan at 25.5-26.0 million tonnes. In the second half year, steel export ratio is estimated to lower from the first six months and steel sales price maintains the level as low as at the end of September. The firm reviewed full-year recurring profit forecast for steel business unit downward by 40 billion yen to 80 billion yen for fiscal 2011 against the previous forecast announced in July. The profit is forecasted to decrease by 50 billion yen for low sales price and by 30 billion yen for inventory evaluation loss while to improve by 40 billion yen for lower raw material prices. By year-to-year comparison, the profit would increase by 60 billion yen due to cost reduction, by 200 billion yen thanks to sales volume increase and price improvement, and by 10 billion yen for inventory evaluation profit, while decrease by 340 billion yen due to raw material cost upsurge.