Kobe Steel Estimates 2-Year Operating Loss for Al & Cu Segment

Kobe Steel announced on Tuesday the firm’s aluminium & copper business unit posted consolidated operating loss of 26.9 billion yen for a full fiscal year ended in March 2009. The profit was impacted by low sales volume of aluminium and copper rolled products and inventory evaluation loss generated from metal price plunge. The unit’s consolidated annual revenue decreased by 15.7% to 379.3 billion yen in fiscal 2008 from fiscal 2007. Kobe Steel estimates consolidated annual revenue at 220 billion yen and operating loss at 15 billion yen for the unit in fiscal 2009.

The full-year revenue decreased by 14.4% to 168.9 billion yen for aluminium rolled products in fiscal 2008 from fiscal 2007, down by 5.2% to 32.6 billion yen for forged products and down by 20.6% to 137.9 billion yen for copper rolled products.

The sales volume of aluminium rolled products decreased by 12% to 295,200 tonnes, among which aluminium plate decreased by 11% to 266,500 tonnes and aluminium extrusion shrank by 20.3% to 28,700 tonnes. The sales volume of copper rolled products decreased by 16.6% to 128,000 tonnes, among which copper sheet and strip dropped by 27.2% to 48,400 tonnes and copper tube declined by 7.3% to 72,500 tonnes.

As to fiscal 2009, Kobe Steel forecasts the demand could bottom out but not recover to the level as high as the first half of fiscal 2008. The firm estimates the annual revenue lowers by 25.6% to 25.6 billion yen for aluminium rolled products in fiscal 2009 from fiscal 2008. The revenue is estimated to decrease by 32.8% to 21.9 billion yen for forged products and by 56.3% to 60.3 billion yen for copper rolled products.

In fiscal 2009, the sales volume is expected to decrease by 9% year-on-year to 242,400 tonnes for aluminium plate and by 23% to 22,100 tonnes for aluminium extrusion. The sales volume is forecasted to decrease by 30.8% to 33,500 tonnes for copper sheet and strip and by 9% to 66,000 tonnes for copper tube.