Nisshin Steel Forecasts 62B Yen Recurring Loss for F2009

Nisshin Steel announced on Wednesday the firm posted consolidated recurring loss at 45 billion yen for the first quarter of fiscal 2009 (April-June 2009), 15 billion yen of which came from the stainless steel business. The firm gained consolidated recurring profit at 6.7 billion yen for the corresponding period of fiscal 2008 and zero for the stainless steel business. The profit was impacted by sales shrinkage, price down, high material cost and inventory evaluation loss.

Nisshin Steel revised down the profit forecast for a first half year and a full year of fiscal 2009. The firm now estimates full-year consolidated recurring loss at 62 billion yen for Apr09-Mar10, which became worse by 12 billion yen from the previous forecast. For the first half of fiscal 2009, the firm estimates 62 billion yen of recurring loss, which lowered from previous forecast of 50 billion yen. For the stainless steel business, the firm estimates recurring loss at 18 billion yen in the first half year. Nisshin Steel gained 22.2 billion yen recurring profit as total and 2.5 billion yen for the stainless steel business in the first half of fiscal 2008.

The firm’s non-consolidated crude steel production is expected to decrease by 630,000 tonnes to 1.41 million tonnes for the first half of fiscal 2009 from a year earlier. Steel sales would decrease by 570,000 tonnes to 1.41 million tonnes. Stainless steel production is estimated to shrink by 70,000 tonnes to 230,000 tonnes and the sales by 70,000 tonnes to 220,000 tonnes. Averaged unit price of steel products would lower by 44,000 yen to 99,000 yen per tonne. The export ratio seems to lower by 3 points to 24%.

The stainless steel business would turn to black in the latter half of fiscal 2009. Full-year recurring loss for the business is estimated at 13 billion yen, which was 30 billion yen loss in fiscal 2008. The firm forecasts crude steel output for the second half of fiscal 2009 at approximately 1.6 million tonnes, including stainless steel at 300,000 tonnes. For a full year of fiscal 2009, the crude steel output totals 3 million tonnes, including stainless steel at 530,000 tonnes. Crude steel totaled 3.68 million tonnes and stainless steel 470,000 tonnes in fiscal 2008.