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Ailing Japanese steel makers for FY 2011 financial accounts

Thursday, 23 February 2012 | 14:00
According to financial report of Japanese listed 63 makers in steel industry, 35 makers revised the consolidated recurring outlook downward for fiscal 2011 ending March 2012 in comparison between outlook in recent third quarter results announcement and outlook in second quarter results release. Only 3 makers revised the outlook upward. They suffer from impact of the major earthquake, Thai flood and higher import and lower export under historical high yen rate and oversupply in Asian market.
The integrated steel makers reported lower profitability due to severe competition with offshore rivals. Nippon Steel and JFE Holdings revised the full year recurring profit outlook downward by JPY 60 billion. Sumitomo Metal Industries reduced the outlook by JPY 45 billion. Kobe Steel reduced the outlook by JPY 25 billion and Nisshin Steel reduced the outlook by JPY 10 billion. Tokyo Steel Manufacturing revised the outlook downward by JPY 10 billion.
Tokyo Tekko, Araya Industrial and Metalart Corporation revised the sales outlook upward for fiscal 2011 while 32 makers revised the outlook downward.
Tokyo Tekko, Metalart and Hokuetsu Meal revised the recurring profit outlook upward while 35 makers revised the outlook downward. Tokyo Tekko and Hokuetsu Metal will gain from lower ferrous scrap cost. Metalart reported higher demand for automobile and construction machinery parts.
The recurring profit outlook for fiscal 2011 is better for 25 makers including Sumitomo Metals, Topy Industries, Yodogawa Steel Works and Tokyo Tekko compared with the profit in fiscal 2010. The six makers including Nippon Yakin Kogyo, Godo Steel, Asahi Industries and Hokuetsu Metal regain profitability. The thirty eight makers will post lower profit.
Other 4 integrated steel makers expect lower profitability in fiscal 2011 from fiscal 2010. They suffer from oversupply in Asian market due to aggressive expansion by Chinese and South Korean makers. Japanese steel makers' margin is narrow due to higher raw materials cost and the steel oversupply market. The twelve carbon steel electric furnace steel makers gain from stable scrap cost.
The nine makers will post higher profit for fiscal 2011 from fiscal 2010. Four special steel makers expect lower profit in fiscal 2011 from fiscal 2010. Three stainless steel makers expect lower profit.
Source: Japan Metal Bulletin
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