Sumitomo Metal Industries announced on Thursday its consolidated recurring profit is forecasted at 100 billion yen for a full year of fiscal 2011 ending in March 2012, increasing by 2.9 times from the previous financial year. The recurring profit for the first half year is targeted to increase by 38.1% to 40 billion yen from the same period of fiscal 2010. For April-June, the 3-month recurring profit doubled to 19 billion yen against April-June 2010. The divided plan is 1 yen per share at the end of September 2011 and 2.5 yen per share at the end of March 2012.Mr. Fumio Honbe, vice president of Sumitomo Metals, explained supply and demand balance is expected to improve for seamless steel tube in overseas markets while domestic steel demand could recover along automobile production increase though there is uncertainty for raw material prices, oversupply by Chinese steel makers and negative impact of electric power shortage in Japan. For April-June 2011, the firm’s crude steel output decreased to 2.77 million tonnes from 3.35 million tonnes in the same period of fiscal 2010 since Kashima iron works was attacked by Japan Earthquake. Average sales price of steel products improved to 104,500 yen per tonne from 87,700 yen of the previous year. The export ratio upped by 3 percentage points to 46%. The recurring profit improved by 9.5 billion yen year-on-year. The profit increased by 51 billion yen thanks to improvement of steel sales price and product mix, by 7 billion yen due to cost reduction and by 9 billion yen along equity method gain and other positive factors. Meanwhile, the profit decreased by 5.15 billion yen for raw material cost upsurge, by 4 billion yen due to aftermath of the earthquake disaster and by 1 billion yen for lower sales volume. For July-September, the recurring profit is forecasted at 21 billion yen. The net sales are estimated at 390 billion yen when the standalone crude steel production is expected to reach 3.45 million tonnes. In the second half of fiscal 2011, the firm targets standalone crude steel output at around 7.1 million tonnes and the recurring profit at 60 billion yen. The export ratio is likely to lower while average steel sales price could maintain upward trend.
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