Tokyo Steel Tries to Reverse Yearly Recurring Loss in F2012

Tokyo Steel Manufacturing announced on Friday the firm forecasts its annual non-consolidated recurring profit would be zero in fiscal 2012 ending in March 2013. The firm forecasts 1 billion yen of recurring loss in the first half year of April-September 2012 while projects to reverse the yearly red for the first time since fiscal 2008. The board member Kiyoshi Imamura explained the firm plans to improve the profitability by annual output expansion at 1 million tonnes from the previous fiscal year.

Tokyo Steel’s sales volume accumulated 2.44 million tonnes in fiscal 2011, 45% of which was long products (37% for shape steels and 8% for bars and wires) and 55% of which was flat products (15% for plates and 40% for sheets). Tahara plant, the main productive site in Aichi, Japan, increased the output by 200,000 tonnes to 350,000 tonnes in fiscal 2011 from fiscal 2010. The total export ratio was 3.4% in value and the export volume decreased by 1,000 tonnes to 93,000 tonnes, mainly hot coils to Asia.

For fiscal 2012, the firm plans each 1.75 million tonnes of the sales volume in 1H and 2H. The unit price is estimated at 63,500 yen per tonne in 1H and 64,500 yen in 2H. Ferrous scrap purchasing cost is estimated at 32,500 yen per tonne for both 1H and 2H. The spread between ferrous scrap cost and steel product price is expected to widen by 1,000 yen in 2H. Thus the recurring loss in 1H could be eliminated in 2H.

Tahara plant’s output is planned to increase by 500,000 tonnes to 850,000 tonnes in fiscal 2012 compared with fiscal 2011. The production at the other three domestic plants, Utsunomiya, Okayama and Kyusyu, is planned to increase by 500,000 tonnes as total.

The firm targets 111 billion yen of the half-year non-consolidated net sales in 1H of fiscal 2012, 24.4% year-to-year plus, with each 1 billion yen of operating loss, recurring loss and net loss.

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