Tokyo Steel to Post Recurring Loss for F2010

Tokyo Steel Manufacturing announced on Wednesday the firm revised the unconsolidated results downward to 8 billion yen of recurring loss in fiscal 2010 ending March 2011, which represents annual loss for 2 years in a row. Higher ferrous scrap cost impacts on the results while the sales volume is lower than original plan when Tahara plant’s operation cannot reach normal operation until fiscal 2011. The firm posted around 2.7 billion yen of recurring loss in October-December, which represents loss for 6 quarters in a row. The firm expects wider loss in January-March than October-December and tries to improve the profitability through price hike.

The firm revised the sales target to 152.5 billion yen for fiscal 2010, which is 8.5 billion yen lower than former outlook as of October 2010. The firm revised the target of operating, recurring and net loss to 8 billion yen, which was negative 9 billion yen from the former profit outlook. With lower production at Tahara, the firm revised the sales target to 1.1 million tonnes in the second half and 2.25 million tonnes in fiscal 2010, both of which are 200,000 tonnes lower than original plan. The firm expects 69,000 yen per tonne of steel selling price and 38,000 yen per tonne of scrap purchase cost in the second half.

The firm posted 4.219 billion yen of recurring loss in April-December 2010 compared with 1.948 billion yen profit in same period of 2009. The firm posted 4.362 billion yen of net loss, which was wider than 1.702 billion yen loss in same period of 2009 while the sales increased by 46% to 114.602 billion yen. The steel sales increased by 35.9% to 1.678 million tonnes, of which export increased to near 5 times at 79,000 tonnes. Flat steel products represented 55% of the total sales with balance of long products. The averaged price increased by 4,600 yen to 68,200 yen per tonne for steel selling price while scrap purchase cost was 34,500 yen per tonne.