Tokyo Steel Expects Higher Profit for F2008 with Low Scrap Cost

Tokyo Steel Manufacturing, Japanese largest electric furnace steel maker, announced on Friday the firm estimated its annual non-consolidated recurring profit at 55 billion yen for fiscal 2008 ending March 2009, approximately 3.2 times from fiscal 2007. The firm revised up the estimation by 5 billion yen from the previous estimation. The firm can gain wider profit than initially forecasted since ferrous scrap cost decreased in the second half of F2008. Ferrous scrap price was around 23,000-24,000 yen per tonne during October-December and is expected to stay at around 23,500 yen for January-March, though the firm had forecasted average 35,000 yen for the second half year. The recurring profit ratio to the net sales will surge to 20% in F2008 from 7% in F2007.

Tokyo Steel revised down its annual non-consolidated net sales forecast to 276 billion yen for F2008, up by 12.7% from F2007 while down by 22 billion yen from the previous estimation. The firm estimates its annual steel product sales at 2.7 million tonnes through F2008, revised down from the previous estimation of 2.95 million tonnes. For 2H of F2008, the firm revised down the steel product sales estimation to 1.1 million tonnes from previous 1.35 million tonnes. The firm forecasts its annual non-consolidated operating profit at 53 billion yen for F2008, revised up from previous 47.5 billion yen and about 3.5 times from F2007, and the non-consolidated net profit at 32 billion yen, revised up from previous 29 billion yen and almost triple from F2007.

For April-December 2008, Tokyo Steel posted non-consolidated net sales at 241.7 billion yen, increasing by 35.6% year-on-year, operating profit at 48.3 billion yen, expanding by 3.2 times, recurring profit at 49.9 billion yen and net profit at 29.7 billion yen, both of which almost tripled.