Tokyo Steel Manufacturing Revises Down Profit Forecast for F2010

Tokyo Steel Manufacturing announced on Tuesday the firm prospects 1 billion yen of non-consolidated recurring profit for a business year ending in March 2011. The firm revised down the estimation from previous 6.1 billion yen. Mr. Naoto Ohori, managing director explained operation of Tahara iron works is slower than originally planned. The firm planned annual output at 500,000 tonnes in Tahara through fiscal 2010 but the actual production is now estimated at around 250,000 tonnes. The firm aims to secure profit by cost reduction in the second half year.

For the second half of fiscal 2010, the firm forecasts steel sales volume at 1.3 million tonnes, average selling price at 63,000 yen per tonne and purchase price of ferrous scrap at 29,500 yen per tonne. Depreciation for Tahara iron works is estimated at 15 billion yen per year. The firm plans to cover the depreciation by cost down.

The firm now estimates non-consolidated annual net sales at 161 billion yen for fiscal 2010, decreasing by 26 billion yen from the previous financial forecast, and net profit at 1 billion yen, down by 4 billion yen from the previous estimation. For the first half year of April-September 2010, the firm posted non-consolidated recurring loss at1.54 billion yen. The net sales were 79.183 billion yen with net loss at 2.485 billion yen.

The firm had estimated ferrous scrap price at 40,000 yen per tonne while the actual price averaged at 36,000 yen for April-September. Meanwhile, average selling price of steel products downed to 69,800 yen from estimated 75,000 yen. The steel sales volume was 1.133 million tonnes, 62,000 tonnes of which was for export. Te export ratio was 5.5%.