NSSC Posts Y/Y Larger Loss in 1H F2011 by Nickel Price Down

Nippon Steel & Sumikin Stainless Steel Corporation (NSSC) announced on Wednesday the firm posted consolidated recurring loss at 6.182 billion yen for first half of fiscal 2011 ending in March 2012, which worsened from 1.973 billion yen of consolidated recurring loss in the same period of fiscal 2010. Consolidated net loss was 8.915 billion yen for first half of fiscal 2011, which also worsened from 1.077 billion yen of net loss in the corresponding period of fiscal 2010.

NSSC explained net margin turned to the black for July-September thanks to sharp demand recovery for chrome series stainless steel sheet from automobile industry. On the other hand, inventory evaluating loss expanded due to strong yen trend and weak nickel market price. Net loss increase was due to a writeoff to deferred tax asset.

, NSSC’s director and executifve officer Hitoshi Ito explained at a press conference most loss was generated by negative inventory evaluation and lower-of-cost-or-market valuation method and NSSC posted non-consolidated recurring profit for July-August thanks to domestic demand recovery. As for current business situation, he explained export of common grade products such as SUS304 is being unprofitable due to extremely high yen exchange rate. NSSC’s export sales rate might decrease to 30-35% in the second half of fiscal 2011, he said.

Consolidated net sales decreased by 5.5% to 121.036 billion yen for first half of fiscal 2011 from a year earlier. Consolidated operating loss was 4.886 billion yen for first half oif fiscal 2011 against 1.058 billion yen of loss in the same period of fiscal 2010.

Non-consolidated steel shipment volume was 396,000 tonnes for April-September, decreasing by 13% from a year earlier. NSSC plans 7% higher shipment volume in the second half year than in the first half.