Japan 4 Major Steels Post Lower Profit in April-June

Japanese major 4 steel makers including Nippon Steel, JFE Holdings, Sumitomo Metal Industries and Nisshin Steel posted lower consolidated recurring profit for April-June from same period of 2007 due to higher raw materials cost while Kobe Steel. Nippon Steel, Sumitomo Metals and Kobe Steel revised the full year profit outlook upward with higher selling price expectation while Nisshin Steel revised the profit outlook downward. JFE Holdings announced the firm expects 450 billion yen or 10.5% lower of recurring profit for the full year from previous year though the firm didn’t disclose due to unknown raw materials cost. Nippon Steel announced on Thursday the firm posted 3.1% lower consolidated recurring profit at 144 billion yen for April-June from same period of 2007. The firm revised the full year outlook upward to 450 billion yen for the year ending March 2009, which is 80 billion higher than original estimate in April and 20.2% lower than previous year. The firm expects the price hike could cover more than 70% of higher cost for raw materials and energy. The firm now expects the raw materials cost up could reach 1.1 trillion yen, which is 100 billion yen higher than original estimate in April while the firm expects price hike represents 800 billion yen of positive impact. The firm tries to increase the selling price more while the firm seeks lower cost structure. JFE Holdings tries to improve the profitability by increasing price and sales volume and reducing the cost when the firm targets more than 500 billion yen of consolidated recurring profit under 3-year plan to the year ending March 2009. The steel unit expects 870 billion yen of higher raw materials cost for the full year while the positive effects from higher volume and price reaches 710 billion yen. The holdings posted 112.1 billion yen of consolidated recurring profit for April-June, which was 22.8% lower than same period of 2007 due to higher raw materials cost. Sumitomo Metals posted 74.4 billion yen of consolidated recurring profit for April-June, which was 1.1% lower than same period of 2007. The firm revised the full year profit outlook upward to 250 billion yen, which is 40 billion yen higher than original estimate in April and 16.2% lower than previous year. The firm now expects the raw materials cost increases by 420 billion yen for the full year from previous year, which is 20 billion yen higher than estimate in April, while the firm expects the full year averaged steel selling price increases to around 122,000 yen per tonne from 105,700 yen in previous year. Kobe Steel posted 42.6 billion yen of consolidated recurring profit for April-June, which was 13.5% higher than same period of 2007. The firm reported the firm gains 27 billion yen from higher sales volume and price and 15 billion yen from inventory valuation for steel, aluminium and copper despite of 41.5 billion yen of negative factor from higher raw materials cost. The firm revised the full year profit outlook upward to 130 billion yen, which is 10 billion yen higher than original estimate in April and 17.7% lower than previous year. The firm expects the raw materials cost increases by 260 billion yen for the year ending March 2009 from previous year, which is 30 billion yen higher than original forecast in April. Nisshin Steel posted 6.7 billion yen of consolidated recurring profit for April-June, which was 64.6% lower than same period of 2007. The stainless unit was break even for the first quarter compared with 12 billion yen of recurring profit for April-June 2007. The firm revised the full year profit outlook downward to 37 billion yen, which is lower than 44 billion yen of original estimate in April and 32.2% lower than previous year. The firm now expects the raw materials cost increases by 111 billion yen for the full year, which is lower than 119 billion yen of original estimate in April.