Tokyo Steel Posts First Profit in 8 Quarters

Tokyo Steel Manufacturing announced on Friday the firm posted 117 million yen of recurring profit in April-June compared with 1.066 billion yen of loss in same period of 2010. The firm regained profitability for the first time in 8 quarters thanks to higher operation rate and smaller loss at Tahara plant.

The sales increased by 19.9% to 46.964 billion yen in April-June from same period of 2010. The operating profit was 11 million yen compared with 1.216 billion yen of loss. The net profit was 257 million yen compared with 1.768 billion yen of loss.

The firm reported averaged steel selling price was 73,500 yen per tonne in April-June, which is 3,000 yen higher than same period of 2010. The ferrous scrap purchase cost increased to 39,000 yen per tonne from 38,000 yen. The steel production was 684,000 tonnes with 55% flat products weight and 45% long products. The export was 57,000 tonnes and 7.9% of the total sales.

Tahara plans increased the production kept more than 30,000 tonnes per month and produced near 100,000 tonnes in April-June while the original plan was 250,000 tonnes in the quarter.

The firm expects 70,500 yen per tonne of averaged steel selling price in July-September. The firm expects the price is 72,000 yen in second half of fiscal 2011 ending March 2012. The firm expects 37,000 yen per tonne of scrap purchase cost both in July-September and the second half year.

The firm revised the sales target by 4 billion yen for the first half and by 8 billion yen for the full year due to slower steel selling price improvement in July-September under higher yen rate. The firm kept the profit target at 3 billion yen of full year operating and recurring profit and at 2 billion yen of full year net profit as original plan. The firm still expects the half year profit is zero for operating, recurring and net profit. The firm kept the production target of 2.8 million tonnes for the year with 1.55 million tonnes in second half year. The firm expects 16.5 billion yen of depreciation for the year.