Nippon Steel announced on Friday the firm expects 120 billion yen of consolidated recurring profit for fiscal 2011 ending March 2012, which is 47% lower than the profit in fiscal 2010. The profit is 60 billion yen lower than outlook as of October 2011 due to lower the steel shipment and price under unfavorable issues including Thai flood. The firm expects 4.1 billion yen of recurring loss for January-March after the firm posted 124.1 billion yen of the profit in April-December 2011, which was 34.1% lower than the profit in same period of 2010.
The firm revised the net profit outlook to zero for fiscal 2011 due to valuation loss of investment in securities while the firm expected 85 billion yen of profit as of October 2011. The firm shelved dividend outlook for the fiscal year end due to uncertainty for the valuation loss and the firm will disclose the outlook after the closing of the fiscal year. The recurring profit was 29.9 billion yen in October-December 2011 compared with 57 billion yen in April-June and 37.1 billion yen in July-September. The profit decreased due to lower profit by the integrated steel business. The integrated steel business profitability got narrow from 33.8 billion yen at unconsolidated recurring profit in April-June 2011 to 37.1 billion yen profit in July-September. The firm posted 4.3 billion yen of the loss in October-December due to historical high yen rate and impact of Thai flood. The steel shipment decreased to 7.2 million tonnes in October-December 2011 from 7.4 million tonnes in April-June and 7.28 million tonnes in July-September. The firm expects the shipment is around 7.3 million tonnes in January-March 2012. The firm expects the averaged steel selling price decreases to 82,000 yen per tonne due to lower contract price and export price compared with 85,800 yen in April-June 2011, 89,800 yen in July-September and 87,600 yen in October-December. The firm expects the export rate in value is around 37% in January-March compared with 41.9% in April-June, 40.1% in July-September and 36.9% in October-December. The firm expects the unconsolidated recurring loss is 28.6 billion yen in January-March. The firm expects the raw steel output decreases by 7% to around 30.1 million tonnes in fiscal 2011 from fiscal 2010. The firm expected 31 million tonnes of output before. However, the output decreased to around 14.6 million tonnes in the second half from expected 15.5 million tonnes due to high yen rate, lower Asian steel market and Thai flood.