Nippon Steel Posts 96.5% Lower Recurring Profit by 96.5% in F2009

Nippon Steel announced on Wednesday the firm’s consolidated recurring profit decreased by 96.5% to 11.8 billion yen in fiscal 2009 ended in March 2010 compared with fiscal 2008. The firm posted net loss for the first time in 7 financial years. The firm reduced production and other costs by total 140 billion yen per year but the profits decreased when the selling volume of steel products shrank and the selling price lowered by 30%. In January-March 2010, the recurring profit improved by 28% to 55.4 billion yen compared with October-December 2009. The firm didn’t announce the financial forecasts for fiscal 2010 since price negotiations haven’t concluded with raw material suppliers and steel product users.

Nippon Steel’s consolidated crude steel output decreased by 4.2% to 29.92 million tonnes in fiscal 2009 from fiscal 2008 while the non-consolidated production decreased by 3.9% to 27.5 million tonnes. The non-consolidated steel shipment decreased by 3.9% to 27.09 million tonnes. Averaged steel selling price lowered by 29,300 yen to 75,400 yen per tonne. Export ratio upped by 5.9 percentage points to 38.4%.

The firm’s consolidated recurring profit worsened by 324.3 billion yen in fiscal 2010 from fiscal 2009. The firm reduced costs for production and raw materials by 475 billion yen. However, the profit was impacted by 530 billion yen due to the lower selling price and worse product mix, by 50 billion yen due to decreasing production and shipping volume, and by 330 billion yen because of inventory evaluation loss.

A trouble of a blast furnace in Oita iron works would cause loss of approximately 17 billion yen for April-June 2010 while the accompanied loss totaled 8 billion yen in fiscal 2009. Nippon Steel explained the blast furnace could enter full operation in or after May. Consequently, Oita iron works’ steel shipment would decrease by 300,000 tonnes for April-June.

The steel business unit posted operating profit at 45.4 billion yen in January-March 2010, increasing by 67% from October-December 2009. The non-consolidated crude steel production and shipment recovered to the level of April-September 2008.