Kobe Steel’ Recurring Profit to Decrease by 71.9% in F2011

Kobe Steel announced on Wednesday its full-year consolidated recurring profit forecast would become 25 billion yen in fiscal 2011 ending in March 2012, lower by 71.9% year-on-year and less than a half of the previous estimation. The consolidated recurring profit decreased by 36.4% to 50.1 billion yen for April-December 2011 from the corresponding period of fiscal 2010. The firm would post three-month recurring loss at 25.1 billion yen for January-March 2012.

The net profit decreased by 73.3% to 12.5 billion yen for April-December 2011 due to loss on revaluation of the investments in securities. The firm forecasts full-year net loss at 10 billion yen in fiscal 2011 though the firm previously estimated full-year net profit at 20 billion yen.

The steel division’s recurring profit maintained the black in past three quarters but it would turn into the red of 22.6 billion yen for January-March. Mr. Hiroaki Fujiwara, vice president of Kobe Steel, explained the business situation becomes severe due to high yen rate and downward trend of world economy. Thus steel sales volume and the price are currently lower than the firm estimated.

Kobe Steel’s crude steel output is forecasted at 1.8 billion tonnes for January-March. Steel sales volume would be about 1.5 million tonnes for January-March.