Yamato Steel Increases Sales and Recurring Profit in F2011

Mr. Yoshinori Toritani, president of Yamato Steel, Japanese major electric furnace steel maker, explained the company’s profit securing strategy for fiscal 2011 ending in March 2012 to Japan Metal Bulletin. Yamato Steel tries to achieve full-year recurring profit at 3 billion yen in fiscal 2011 by price improvement, better product mix and cost reduction.

Yamato Steel could gain full-year profit in fiscal 2010 despite of ferrous scrap cost upsurge. Mr. Toritani explained the firm’s sales volume of steel products increased by 7,000 tonnes to 466,000 tonnes in fiscal 2010 from fiscal 2009 while the average sales price upped by 6,000 yen to 64,900 yen per tonne. H-beam shipment represented steady for building projects while the shipment to dealers decreased. H-beam export halved to 8,000 tonnes. Yamato Steel’s full-year net sales increased by 2.6 billion yen to 37.8 billion yen in fiscal 2010 from fiscal 2009 while the recurring profit decreased by 1.4 billion yen to 1.2 billion yen.

Mr. Toritani described the firm designed out full-year financial targets for fiscal 2011 before Japan Earthquake emergence, along which full-year net sales were projected at 48.5 billion yen with recurring profit at 3 billion yen. Mr. Toritani said the revenue would decrease along domestic demand decline and steel market price down after the disaster. However, he said, Yamato Steel tries to sustain and achieve the full-year profit target in fiscal 2011.

Mr. Toritani gave an outlook that ferrous scrap price would maintain high level in fiscal 2011. Thus Yamato Steel should improve the selling price and increase the sales volume by about 15% to 537,000 tonnes. Mr. Toritani suggested the firm tries to increase order receipts related to building and civil engineering projects by expansion of large size menu of steel products such for wide sheet pile and H-beam. Mr. Toritani said wide sheet pile supply could help restoration and reconstruction works in disaster areas.

Meanwhile, the firm projects productive cost down by 2,000 yen per tonne in the steel business unit, said Mr. Toritani.